Saudi Arabia has recorded its weakest quarter for land sales in nearly three years, indicating a substantial decline resulting from government initiatives aimed at curbing speculation in undeveloped land. The authorities implemented several measures last year to address rising housing costs, which were deemed unacceptable by Crown Prince Mohammed bin Salman.
Key strategies included increasing the “white land tax” on unused plots and auctioning vacant land to smaller buyers, which analysts suggest encourages landowners to commence construction projects.
Land Transactions Down 55% YoY
According to the Real Estate General Authority, land transactions reached just 21,320 in the first quarter of 2026, marking a 55% decrease from the previous year and the lowest figure in a dataset dating back to mid-2023.
The total value of land sales dropped 65% YoY to SAR 20.71B (approximately $5.5B).
Meanwhile, villa and apartment sales also saw declines albeit to a lesser extent; villa transactions fell by 44% to over 3,500 while apartment sales decreased by 38% to 12,650.
Undeveloped Plots Taxed
At the beginning of 2026, the Saudi government billed over 60,000 landowners in Riyadh under the revised white land fee framework, which tripled the tax rate on undeveloped plots over 5,000 square metres to as much as 10% of their assessed value annually.
The issuance of building permits rose by 28% YoY, reaching 7,350 in April, as more citizens opted for self-building rather than buying from developers.
Prices of Riyadh’s Land
Prices for land in some areas of Riyadh have reportedly decreased by 20 to 30% as owners aim to sell before facing penalties.
Despite cooling sales in the land and villa sectors, the construction pipeline remains robust, with the Saudi Contractors Authority reporting the awarding of 25 contracts valued at SAR29.5B in June 2026: the highest monthly count this year.
This followed a record in May, with 18 contracts worth SAR30B awarded.
While apartment sales fell by 38% to 12,650 in the first quarter, the total sales value declined by 43% to SAR8.34B, indicating resilience in a market where self-build activity is more prevalent in land and villas compared to apartments.
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