Samer Choucair: Saudi Real Estate Enters a Repricing Phase Driven by Financing Quality and Operating Cash Flows
Investment leader Samer Choucair said the decline in the value of Saudi real estate transactions to approximately SAR 24.4 billion in August 2026 does not signal a weakening of the sector’s investment case. Instead, it points to a more selective phase in the allocation of liquidity and the assessment of asset quality.
Samer Choucair explained that the 15% annual decline in transaction value, following an increase to around SAR 35.5 billion in July, should not be viewed in isolation from the continued growth of real estate financing. He noted that the real estate loan portfolio of commercial banks approached SAR 980 billion by the end of the second quarter.
Samer Choucair said: “Capital seeking returns from Saudi real estate in 2026 will not find them by chasing transaction values. It will find them in assets that remain financeable, liquid, and rentable after the heat of trading has cooled.”
Lower Trading Activity Reshapes Investment Priorities
Samer Choucair noted that August transaction values were close to levels recorded in May and June, making the monthly movement more consistent with fluctuations in liquidity than with a fundamental change in the direction of the market.
The number of transactions also fell by around 7% to approximately 24,000, a decline that was less severe than the contraction in the value of nonresidential activity.
Choucair said the significance of the data lies in the different performance of individual market segments.
Residential transactions reached approximately SAR 17.9 billion, while nonresidential activity stood at around SAR 6.5 billion. Housing therefore accounted for 73% of total transaction value, indicating that market activity remains closely linked to end user demand for residential units.
Samer Choucair said: “Institutional investors do not buy the Saudi real estate market as a single basket. They distinguish between raw land, residential units, income generating assets, and projects connected to infrastructure.”
From Land to Operational Assets
Samer Choucair said the approximately 22% decline in the value of residential land transactions, combined with an increase in transactions involving villas and residential floors, reflects a change in the composition of housing demand.
He said these developments could gradually redirect capital toward real estate products that can be delivered, operated, or financed rather than strategies dependent on the resale of undeveloped land.
Choucair added that stronger activity in villas and residential floors points to continued end user demand, while weaker land trading requires investors to reassess short term speculative strategies.
Riyadh, Makkah and the Eastern Province Remain at the Center of Capital Flows
Samer Choucair said geographic concentration remains a major factor in assessing investment opportunities, with Riyadh, Makkah, and the Eastern Province together accounting for more than 80% of transaction value in August.
He said Riyadh continues to benefit from expanding economic activity and the relocation of companies and regional headquarters.
Makkah is supported by residential, tourism, and religious demand, while the Eastern Province is underpinned by an economic base spanning energy, industry, and logistics.
Samer Choucair said: “The shift from market beta to asset alpha is becoming increasingly clear. Returns are no longer generated simply by exposure to a broad increase in market activity. They depend on selecting the right location, developer, and asset capable of producing sustainable cash flows.”
Real Estate Financing Increases the Importance of Secondary Markets
Samer Choucair said continued growth in real estate financing increases the importance of secondary mortgage markets and related fixed income instruments as financial institutions expand the management of residential financing portfolios.
He believes these developments create opportunities in securitization, real estate asset management, and specialized finance, alongside property technology, facilities management, real estate registration, and digital services.
Selectivity Defines the Next Phase
Samer Choucair concluded that the August data do not represent a signal to exit Saudi Arabia’s real estate market. Instead, they reflect a transition toward a phase that demands greater selectivity.
He said: “Selectivity has become the strategy. Smart capital will not ask only how large transaction volumes are. It will ask where they are concentrated, what the quality of the asset is, and who has the ability to finance, operate, and lease it.”
Samer Choucair added that long term investors need to distinguish between monthly trading movements, the annual credit and supply cycle, and the structural objectives of Vision 2030.
He said the future of real estate investment in Saudi Arabia will increasingly be determined by an asset’s ability to produce genuine and sustainable income rather than simply increase in value when it is resold.