Executive Key Takeaways
- •The index rose 1.3% year on year in Q2 2026, reversing Q1's 1.6% decline
- •Residential rose 2.6% while commercial fell 3.2% — the market is not moving as one
- •Residential plots gained 6.3% while villa prices fell 9.7%
- •Makkah region rose just 0.4% — national averages say little about your district
The Headline Number
According to GASTAT's Real Estate Price Index, prices rose 1.3% year on year in the second quarter of 2026, and 3% compared with the previous quarter. That follows a 1.6% annual decline in the first quarter of 2026 — so the direction has turned, but from a soft base rather than from a boom.
Residential and Commercial Are Moving in Opposite Directions
The residential sector rose 2.6% year on year in Q2 2026, while the commercial sector fell 3.2%. A single national "property market" number is therefore misleading: a residential buyer and a commercial investor were looking at two different markets in the same quarter.
Inside the Residential Number: Land Up, Villas Down
The residential gain was not spread evenly. Residential plots rose 6.3% year on year and apartments rose 1.1%, while residential floors edged up 0.4% — and villa prices fell 9.7%. In other words, the strength was concentrated in land, not in built villa stock.
Regional Variation Is Wider Than the Average
Regional readings in Q2 2026 ranged from a 10.4% annual gain in Al-Jawf to a 10.1% decline in Hail. The Makkah region — which includes Jeddah — recorded a modest 0.4% annual rise, well below the national residential figure. A buyer using the national headline to judge a specific district is working from the wrong number.
What This Means for Buyers
Three practical conclusions. First, check the asset type you are actually buying, not the market as a whole — apartments and villas moved in opposite directions this quarter. Second, verify prices at district level, because regional spreads exceeded twenty percentage points. Third, treat a single quarter as a data point, not a trend; the index moved from negative to positive in two quarters.
“A national index describes the market. It doesn't describe your street.”
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