Knight Frank records sharp drop in Saudi residential deals in Q1 2026.

National transaction volumes halved year on year while Riyadh volumes and values fell 82 percent, yet apartment and villa prices still rose in the main cities.

ByOmnia DeskThe Omnia Markets news desk3 min read1 source

Khayala, Saudi Arabia. From the Omnia catalogue

Knight Frank reported on 29 October 2026 that Saudi Arabia’s residential market saw a sharp slowdown in activity in the first quarter of 2026. Deal volumes fell 50 percent year on year to 29.49 thousand transactions, Argaam carried in Arabic, while transaction values dropped 57 percent to 22 billion riyals. The firm said the slowdown was clearest in Riyadh, where both volumes and values declined 82 percent against the same period a year earlier. Jeddah, the Dammam urban area, Makkah and Madinah also posted weaker activity.

Knight Frank linked the weaker volumes to rising housing affordability pressure, softer mortgage demand and negative sentiment tied to the regional conflict. Even so, it said residential unit prices continued to rise in most major markets. Riyadh apartment prices grew 6.3 percent year on year in the first quarter of 2026 and villa prices 4.9 percent. Jeddah apartment prices rose 2 percent and those in the Dammam urban area 2.3 percent. The firm added that these gains largely reflected price resilience in January and February before the conflict’s effects intensified, and that the full impact had not yet appeared in the overall deal data.

The National Housing Company remained the main driver of new residential supply through integrated communities, Knight Frank said. Separately it noted that the office market, especially in Riyadh, stayed firm on tenant demand and limited high-quality institutional stock. What later quarters will show for residential volumes is not yet known from this release.

From the JournalRiyadh vs Jeddah: where to live, and what changes by neighbourhood.

Our take

Omnia Desk

Volumes cracked first. Listed asking prices have not.

For a foreign buyer weighing timing or a negotiation after the ownership opening, the Knight Frank first-quarter figures matter more as a demand signal than as a price reset. National deal counts halved and Riyadh activity collapsed 82 percent, yet the same report still shows apartment and villa prices up in Riyadh, Jeddah and Dammam. That split matches the pattern we tracked earlier: headline growth can keep running even when transaction momentum cools.

The legal door for non-Saudis is already open under the rules set out in Saudi Arabia has opened its property market to foreign buyers. This data does not change those zones or the cost stack. It does, however, give leverage on off-plan stock still listed under Wafi escrow, including schemes such as Khayala by Al Majdiah from SAR 266,799, where stage payments and slower secondary demand can matter more than last year’s price print. Check the latest comparable sales in the exact district rather than the national average before you lock a number.

Office strength noted by Knight Frank is a separate story and does not lift residential liquidity. If you already own, the report does not force a sale; it simply flags that Q1 2026 was a thin market in which asking levels held longer than deal flow.