KSA Real Estate Report - H1 2026 Review and H2 2026 Outlook

Executive Summary

Saudi Arabia’s real estate sector entered H1 2026 with policy-led resilience even as regional conflict and an affordability reset weighed on residential activity. Riyadh’s office market stayed structurally tight on RHQ-driven demand and hyperscaler cloud investment, while industrial & logistics sector outperformed as the Saudi rerouted trade through its Red Sea coast amid Strait of Hormuz disruptions. Residential sales declined sharply, with mortgage lending down 43.3% y/y in Q1 2026, as the vacant-property fee and Riyadh’s rent freeze reshaped investor behaviour.

Based on assessment of key macro factors that would impact the Saudi property market, the real estate market is expected to remain stable in the second half of 2026. The Markaz Real Estate Macro Index score of 3.3 out of 5.0 reflects a moderate-to-neutral tone, with GDP recovery, government-led investment and reform momentum providing support, even as fiscal deficit, inflation and residual conflict effects remain key watchpoints.