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Saudi Arabia Real Estate Market Review Q1 2025

Saudi Arabia's Economic Engine Drives Optimistic Real Estate Outlook

May 7, 2025 10 Minute Read

Riyadh's office market in Q1 2025 continues to exhibit strong demand exceeding available premium space, causing significant rental growth, including a notable 21% year-on-year surge.
The residential sector saw robust mortgage growth with a 28.3% annual increase in new loans through February 2025, driven by apartment lending, while overall property values climbed by 5.1% in Q1 2025, driven by land and villa appreciation, with Riyadh leading regional price gains.
Saudi Arabia's retail sector is prominently expanding, evidenced by an approximate 8% year-on-year rise in POS sales in the first two months of 2025 due to population increases, tourism, and shifting consumer habits, though potential long-term oversupply from Riyadh's mall developments warrants monitoring.
The hospitality market is thriving, achieving record inbound tourism expenditure of SAR153.61 billion in 2024 and a 9.5% rise to 30 million international visitors, significantly boosting the economy and spurring substantial hotel development and investment in preparation for future tourism targets and global events.
Saudi Arabia's industrial sector is demonstrating strong expansion, supported by increased petrochemical profitability and non-oil exports, fueling higher demand for logistics facilities, and rising industrial lease rates, especially in Riyadh, alongside substantial governmental programs and large-scale projects aimed at sector and infrastructure growth.

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