Dammam Leads Saudi Property Growth with 71% Sales Surge in Q1 2026
Gulf News
Dammam's residential property market surged 71% in Q1 2026, outpacing Riyadh and Jeddah, despite regional challenges and rising new home supplies.
Dammam Tops Residential Property Growth in Saudi Arabia
Dammam experienced the fastest residential property growth among Saudi Arabia’s major cities in the first quarter of 2026. Home sales in the city skyrocketed by 71% to SAR 3.6 billion, with nearly 2,900 homes sold between January and March — marking a 41% increase from the preceding quarter’s SAR 2.1 billion in sales, according to data from Cavendish Maxwell.
Sales volume improvement was significant, with transactions 25% higher than in Q1 2025 and total values rising by 48%. March emerged as the busiest month with 1,265 residential sales, occurring even amid ongoing regional geopolitical tensions.
Comparative Market Dynamics in Riyadh and Jeddah
Meanwhile, Riyadh and Jeddah exhibited more moderate market activity. Affordability challenges, increased financing costs, and important cultural periods such as Ramadan and Eid tempered sales in these cities. Riyadh tenants gained some respite as apartment rents declined 2.8% and villa rents fell by 1.2% compared to Q4 2025, partly influenced by a rent freeze introduced in September and a surge in new residential supply.
However, rental costs were still higher than a year earlier, with apartment rents up almost 6% and villa rents increasing by over 5%, reflecting an easing pace in rent growth. Riyadh saw 8,800 homes sold for SAR 13.4 billion in Q1, with quarterly transaction volumes rising 12% and sales values up more than 4%. Yet, sales volumes and values remain far below Q1 2025 levels by 64% and 72%, respectively.
Price Trends Across Key Cities
Annual residential sales prices continued rising in Riyadh, Jeddah, and Dammam, although quarterly changes were slight. Riyadh apartment prices averaged SAR 6,200 per square metre, growing 3.7% year-over-year, while villas climbed nearly 7% to SAR 5,700 per square metre. Jeddah apartments increased nearly 2% annually to SAR 4,400 per square metre, and villas to SAR 5,200, posting respective quarterly gains.
Dammam’s apartment prices rose 4% year-on-year, with villa prices up by over 2%. Rentals followed similar growth patterns; Jeddah saw modest rental growth with apartments up 2.7% and villas nearly 1%, whereas Dammam’s apartment rents increased 3.2% annually and villa rents by 2.1%.
New Residential Supply Supporting Market Balance
Riyadh expanded its housing stock by nearly 3,000 units in Q1, reaching around 1.94 million homes, with approximately 31,000 more units slated for delivery this year and 61,500 by 2028. Jeddah’s inventory grew by 1,500 units to 1.1 million, with an expected 17,500 new homes in 2026 and nearly 46,000 planned over the next two years. Dammam projects adding 4,800 homes this year, progressing its stock to 435,000 units, and further increases scheduled for 2027 and 2028.
Kevin Duffield, Director of Built Asset Consulting at Cavendish Maxwell, commented: "Development pipelines are evolving across each city, with Riyadh seeing most new supply in the medium term, while growth in Jeddah and Dammam is more modest and measured. This expanding pipeline will play an increasing role in balancing supply and demand."
Market Resilience Amid External Uncertainties
Duffield added that although regional geopolitical developments are being closely monitored, Saudi Arabia’s residential market continues to be supported by robust domestic demand with a predominantly local buyer base, providing resilience against short-term external shocks.
Impact of New Foreign Ownership Regulations
Starting January 2026, Saudi Arabia’s foreign property ownership law permits non-Saudi individuals and companies to buy real estate in designated areas. Locations in Riyadh such as Qiddiya, New Murabba, and King Abdullah Financial District, over 55 zones in Jeddah, and strategic projects like NEOM, The Red Sea Project, Amaala, AlUla, and King Abdullah Economic City are included. However, ownership in Makkah and Madinah remains restricted to Muslim buyers within specified zones.
What This Means for Real Estate Agents
The robust growth in Dammam’s residential market highlights emerging investment hotspots beyond traditional hubs like Riyadh and Jeddah. Agents should monitor delivery schedules carefully and advise clients on new supply pipelines and evolving regulatory frameworks, including foreign ownership rules. Understanding these dynamics is key to capitalizing on opportunities and guiding buyers through a market adapting to both local demand and broader geopolitical factors.
Based on reporting from Gulf News. Summary and analysis by Propilot AI.
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