Staff Writer

The combination of high borrowing cost and surging house prices is cooling demand in Saudi Arabia as the domestic home ownership rate approaches the government’s 70% target by 2030, global property consultancy Knight Frank has said.

Demand from first-time home buyers slipped to 29% in 2025, compared to 40% in 2023 and 84% in 2022.  However, 33% of existing Saudi homeowners plan to buy a second home or upgrade their current arrangements during the same period.

Homeownership aspirations appear to be highest among the country’s top earners, with 45% of Saudi nationals earning over SAR 50,000 per month keen on transacting this year.

Knight Frank said that the homeownership rate among Saudi nationals stood at 63.7% at the end of 2023 and is within touching distance of the 2030 goal of 70%.

Residential transactions, which accounted for 61.5% of all real estate deals by total value, registered a 38% increase to 202,661 in 2024. The value of residential transactions increased by 35% year-on-year to SAR 164.8 billion ($43.95 billion) last year.

Apartment prices surged 75% on 2019 levels, while villa prices rose by 40% over the same period in Riyadh, the capital city.

“What we are experiencing now is an organic slowing in demand as the 70% home ownership target approaches and as residential values start to peak in the current cycle. The rampant house price growth across the country, too, is curbing the appetite to purchase,” said Harmen de Jong - Regional Partner, Strategy & Consulting, KSA, Knight Frank.

Therefore, it is expected that the level of demand for primary homes will begin to ebb unless new sources of demand, such as amending rules to permit international ownership, are unveiled, he said.

(Editing by Brinda Darasha; brinda.darasha@lseg.com)

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