While there has been a slowdown in demand in the Saudi market, the demand for affordable housing is on the rise. With affordability becoming a key driver against the backdrop of high interest rates, apartment inventory is becoming a new trend in the residential market. Especially in Riyadh, approximately 80% of apartments sold in the past 12 months were priced between 250,000 to 1 million Saudi riyals, mainly targeting the middle-to-low-income market.

Stefan Burch, Partner and Real Estate Leader at Deloitte Middle East, stated, "In the context of high interest rates, residential market demand has shifted towards apartment inventory, and the demand for affordable housing is increasing."

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Furthermore, South Riyadh has become a destination for many buyers due to the availability of affordable stocks. Over the past five years, South Riyadh has witnessed the largest growth in transaction shares, mainly due to the availability of affordable inventory homes. North Riyadh has also emerged as a prominent residential hub.

Despite increasing supply, the residential real estate market in Saudi's major cities still faces some challenges. For example, rising property prices and rents are making it difficult for many families to afford, especially against the backdrop of economic downturns. Additionally, the government needs to take measures to address the pressures of urbanization and population growth to ensure a balance between housing supply and demand.