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Al Rajhi Capital Sees Positive Impact on Saudi Real Estate Sector

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Business Honor
19 September, 2025

New Saudi regulations aim to stabilize real estate, boost affordability, and support long-term growth.

According to Al Rajhi Capital, the most recent regulatory adjustments in Saudi Arabia's real estate market are expected to improve market performance in the medium to long run, particularly in Riyadh, the country's capital. These new rules are intended to curb speculative pricing and stop price gouging in planned urban regions, the firm's recent study states. This will therefore probably increase buying power and boost consumer confidence in the market place.

An increasing population in the government's Regional Headquarters Program and the hosting of important international events like Expo 2030 and the 2034 FIFA World Cup are some of the factors responsible for this real estate growth. The city is also changing as a result of major advantages including Diriyah Gate, King Salman Park and the New Murabba Project. In spite of these changes, the research found that real estate activity fell considerably in the second quarter of 2025. Also, transactions reached their lowest levels in the last nine quarters, down 41% from the previous quarter and 22% from the previous year. The primary cause of this slowdown is the careful actions of investors and others who are awaiting further information about the effects of the new rules.

The article also noted that in order to quicken development and prevent possible costs for holding idle land, some investors who own substantial land plots are likely to work with real estate funds. Furthermore, a potential interest rate reduction later this month might promote a rebound in the demand for houses. The main recipients of the reforms, according to Al Rajhi Capital, are banks, development funds, building material suppliers, mortgage providers, and real estate developers. In the upcoming year, additional regulatory changes are expected to be implemented, such as permitting foreign ownership of real estate in specific regions and enacting new regulations regarding empty buildings and rental price caps.