First-Time Homebuyer Guide Saudi Arabia: Everything You Need to Know in 2025-2026

First-Time Homebuyer Guide: Saudi Arabia 2025-2026

Purchasing your first home in Saudi Arabia has never been more accessible, thanks to the government’s comprehensive housing programme under Vision 2030. With Sakani subsidies potentially covering up to 83 percent of property value for low-income families, SAMA’s repo rate at its lowest in over three years at 4.25 percent following six consecutive cuts since August 2024, and NHC delivering more than 134,000 new housing units in 2025 across 25 urban destinations in 17 cities, the institutional infrastructure for homeownership is robust. Over 4.6 million users have registered on the Sakani platform, and more than 93,000 families moved into their homes in 2024 — a nine percent increase over the previous year. This guide covers everything first-time buyers need to know to navigate the process confidently.

Am I Eligible for Government Support?

The foundational question for any first-time buyer is whether you qualify for government support through Sakani. The key criteria are:

• Nationality: Saudi citizenship required
• Age: Between 20 and 60 years old (the minimum was reduced from 25 to 20 in May 2025, reflecting the demographic reality that young Saudi adults are forming independent households earlier)
• Property history: No property ownership by you or family members (spouse or children) in the past five years
• Income qualification: Meeting income-based thresholds that determine your support rate on the subsidy matrix

If you qualify, the financial benefit is substantial — total government support can exceed 80 percent of property value for lower-income families. Proceed through Sakani before considering private-market alternatives. Over 117,000 families benefited from Sakani solutions in 2024, and 54,000 more were served in just the first half of 2025.

If you do not qualify for Sakani (e.g., you previously owned property within five years, or you are a non-Saudi resident), you can still access the mortgage market through standard bank financing under SAMA’s regulations, with 10 percent minimum down payment and 55 percent DTI limit. Non-Saudi buyers can now purchase property under the new foreign ownership law (Royal Decree M/14, effective January 2026), which introduces a zone-based model regulated by REGA.

Understanding Your Financial Position

Before selecting a property, conduct a thorough assessment of your financial position. This involves several key calculations:

Monthly debt capacity: Under SAMA regulations, your total monthly credit obligations (including the proposed mortgage) cannot exceed 55 percent of your monthly income for standard borrowers, or 65 percent for housing programme beneficiaries. Calculate this ceiling first, then subtract existing obligations (car loans, credit card minimums, personal loans) to determine your available mortgage payment capacity.

Down payment readiness: Sakani beneficiaries purchasing properties at SAR 800,000 or less need only 5 percent down payment through Dhamanat. On a SAR 700,000 property, that is SAR 35,000. Combined with the non-refundable grant of up to SAR 150,000, your actual cash outlay at closing may be minimal or even zero. For purchases above SAR 800,000 or for non-Sakani buyers, the standard 10 percent applies. On a SAR 1,200,000 property, that means SAR 120,000 in cash.

Total cost of ownership: The purchase price is only part of the equation. Factor in closing costs, community and maintenance fees, home insurance, furnishing costs, and ongoing utility expenses. Sakani’s Furniture subsidy package can help with furnishing costs for qualifying buyers.

Subsidy rate determination: Your income level determines how much government support you receive. If your monthly household income is SAR 14,000 or less, you receive 100 percent REDF profit coverage on the first SAR 500,000 financed — regardless of family size. Above SAR 14,000, the support rate decreases to between 35 and 100 percent based on a matrix weighing income and family size. Understanding your support rate is critical because it directly determines your monthly out-of-pocket financing cost.

Choosing Your Property Type

Saudi Arabia’s housing market offers several property types, each with distinct characteristics for first-time buyers:

Apartments: The most affordable entry point, particularly in urban centres. Riyadh apartment prices have risen 82 percent since 2019, but remain the most accessible option for many first-time buyers. Available in both existing buildings and new NHC developments. Apartments are well-suited for young couples and small families beginning their homeownership journey, with lower maintenance obligations and typically stronger rental demand if you later decide to upgrade.

Townhouses: Middle-tier option offering more space than apartments with shared-wall construction that keeps costs below standalone homes. Common in NHC communities like SEDRA (which is delivering 30,000+ homes across eight phases in north Riyadh), Khuzam, and Al Nada. ROSHN’s SEDRA Phase 5, launched September 2025, includes townhouses among its 2,000+ new homes in 10 different designs.

Duplexes: Two-story homes, often with separate entrances, providing family privacy while sharing structural walls. Widely available in NHC and ROSHN developments. ROSHN’s WAREFA community in eastern Riyadh offers 2,380 units including duplexes across 1.4 million square metres, while ALDANAH in Dhahran features premium duplexes with construction started May 2025.

Villas: Standalone homes representing the premium tier. Villa prices rose 7.1 percent year-on-year as of mid-2025. Available across price ranges from basic to luxury. ROSHN’s ALMANAR community near Makkah (33,000 homes, ground broken December 2024) and ALFULWA in the Eastern Province (18,000 homes) offer villas in master-planned environments with schools, mosques, healthcare, parks, and retail.

Financing Your Purchase: Two Pathways

The Sakani Route (Subsidised Financing):

1. Register on sakani.sa — accessible via web, mobile app, or physical Sakani centres
2. Complete eligibility assessment through automated system checks
3. Receive your support rate determination from the subsidy matrix
4. Browse available properties on the platform — over 106,000 housing contracts were signed through Sakani in H1 2025
5. Select a financing institution from REDF’s partner bank network
6. Coordinate financing with REDF subsidy terms applied automatically

Benefits include REDF profit coverage (35-100 percent on first SAR 500,000), non-refundable grants (SAR 100,000-150,000), VAT exemption where the state bears the VAT cost for first-time homebuyers, 5 percent down payment option for properties under SAR 800,000, the higher 65 percent DTI limit, and financing terms of up to 25 years with support for up to 20 years.

The Private Mortgage Route:

Approach any SAMA-licensed bank directly for standard real estate financing. Standard terms include 10 percent down payment, 55 percent DTI limit, market-rate financing costs (full profit borne by borrower), and maximum 25-year term. This route offers faster processing and broader property eligibility but significantly higher costs than the subsidised pathway. With SAMA’s repo rate at 4.25 percent, banks set mortgage rates at a margin above this base. Total outstanding real estate loans reached SAR 951.3 billion by end of 2025, demonstrating the market’s depth and maturity.

Choosing Between NHC and Private Developers

NHC communities offer master-planned environments with integrated amenities, standardised quality, and direct Sakani platform integration. With over 39 major projects across 17 cities, NHC holds 62 percent market share in off-plan projects and is the largest real estate developer selling end units. NHC’s revenue reached a record SAR 26 billion in 2024 — higher than its combined 2022 and 2023 revenues — signalling operational maturity and delivery capacity. The company launched SAR 60 billion in housing and commercial investment opportunities for 2026, and new international partnerships worth over SAR 8 billion with entities from South Korea, China, and Egypt (total global partnerships exceeding SAR 40 billion) bring additional expertise and capacity.

Private developers offer more variety in location, design, and specification. The Developer Support Program has qualified 310 certified developers, and 36 international developer partnerships across 7 countries bring global expertise. All off-plan purchases — whether NHC or private — must be Wafi-licensed with escrow account protections.

For off-plan purchases, verify these protections before committing:

• Wafi licence: Confirm the project holds a valid licence — 434 projects are currently active
• Escrow account: All buyer payments must go into a dedicated project escrow account with a unified number referenced in the sale contract. Developers cannot receive payments directly
• Developer qualification: The developer must hold a qualification certificate from the Wafi Committee and be registered on Etmam (Real Estate Developer Registry)
• Structural warranties: Up to 10 years on structural and mechanical works
• Late delivery compensation: 7 percent annual compensation in the buyer’s favour if delivery deadlines are missed
• Maximum reservation deposit: Developers cannot collect more than 5 percent of unit value as a reservation amount
• Enhanced enforcement since 2022 has decreased fraud and non-delivery rates by 68 percent

Down Payment Strategies

For Sakani beneficiaries purchasing under SAR 800,000: Your minimum down payment is just 5 percent thanks to Dhamanat, which has SR 18 billion in capital and has helped over 116,000 beneficiaries with housing ownership since 2018, providing SAR 77 billion in guaranteed real estate loans. Combined with the non-refundable grant (up to SAR 150,000), your actual cash requirement may be zero or near-zero. On a SAR 600,000 property, the 5 percent down payment is SAR 30,000, but the SAR 150,000 grant more than covers this.

For purchases above SAR 800,000 or non-Sakani buyers: The standard 10 percent down payment applies. Save systematically, taking advantage of the Riyadh rent freeze (if applicable) to preserve disposable income. The five-year freeze locks rents at 2025 levels until September 2030, providing predictability that supports savings accumulation. Outside Riyadh, rents in Jeddah are growing 3-6 percent year-on-year, making early purchase decisions increasingly important.

Timing considerations: The residential sector price index fell 2.24 percent during the year to Q4 2025, contrasting with a 5.12 percent year-on-year increase in Q1 2025. Transaction volumes in Riyadh fell 31 percent year-on-year in H1 2025 as the market recalibrated. This moderation, combined with SAMA’s continued rate-cutting cycle and expanding housing supply, may create more favourable conditions for buyers in 2026. Jadwa Investment expects demand for mortgage financing to gradually improve during 2026, supported by declining interest rates and greater availability of housing options.

The Purchase Process: Step by Step

1. Assess eligibility — Determine whether you qualify for Sakani subsidies. Register on sakani.sa or call 199090
2. Get pre-approved — Secure preliminary financing approval before selecting a property. Compare offers from multiple SAMA-licensed banks, as margins above the base rate vary
3. Select property — Choose from NHC developments, Wafi-licensed off-plan projects, or existing properties. Use the Sakani platform to browse integrated options
4. Complete due diligence — Verify property registration, building permits, Wafi licensing for off-plan, escrow account details, and FAL licensing of any agents involved. FAL licences are mandatory from REGA — individual licences cost approximately SAR 300 per year, and company licences approximately SAR 1,000 per year
5. Finalise financing — Lock in your financing terms with the chosen bank. For Sakani beneficiaries, REDF subsidy terms are applied automatically
6. Sign contracts — Execute purchase agreement and financing contract simultaneously. VAT exemption is applied at closing for eligible first-time buyers
7. Register ownership — Complete registration with the Real Estate Registry. For non-Saudi buyers, mandatory registration with the Real Estate Registry is required for any transaction involving real rights

Common Pitfalls to Avoid

• Exceeding DTI limits — Ensure total monthly debt obligations stay within SAMA’s 55 percent (standard) or 65 percent (programme) limits. Factor in all existing credit obligations before committing to a mortgage
• Ignoring total cost of ownership — Factor in maintenance, community fees, insurance, furnishing, and utility costs beyond the purchase price. These can add 10-15 percent to your annual housing expenditure
• Rushing off-plan purchases — Verify Wafi licensing, escrow protections, developer qualification, and delivery timeline before committing. Check the project’s feasibility study, which is required for every off-plan licence and must include financial, construction, and marketing data
• Not comparing financing offers — Different banks offer different margins above SAMA’s base rate. Even small differences in margin compound significantly over a 20-25 year financing term
• Overlooking location fundamentals — Proximity to employment centres, schools, healthcare, and public transportation affects both quality of life and long-term property value. NHC and ROSHN communities typically integrate these amenities by design
• Skipping the Sakani pathway — Some eligible buyers go directly to private financing without checking Sakani eligibility, potentially forgoing hundreds of thousands of riyals in subsidies
• Underestimating the affordability gap — The affordability gap analysis shows that middle-income families (SAR 14,000-25,000 monthly) face particular challenges as property prices in major cities have outpaced subsidy cap adjustments

Market Context for 2026

The Saudi real estate market is forecasted to grow from over USD 75 billion in 2025 to nearly USD 110 billion by 2030. The residential construction market stands at USD 19.59 billion in 2025, projected to reach USD 25.21 billion by 2030 at a 5.17 percent CAGR. The construction industry is expected to grow at a 5.2 percent average annual rate from 2025 to 2028. These growth figures indicate expanding supply that should gradually improve options for first-time buyers.

The 2026 mortgage outlook expects gradual improvement in demand, supported by the stabilised rate environment, expanding housing supply, and potential price moderation. New mortgage originations totalled 108,795 contracts worth SAR 80.42 billion in 2025, and the market is expected to recover from its late-2025 softness as rate cuts take full effect.

For real-time market data, see our Dashboards. For programme details, visit Sakani Program, Mortgage Reform, and the Affordable Housing Guide.