When to Buy Land and When to Wait? A Scientific Guide Backed by Studies for Making the Right Decision in 2026

Introduction: The Question That Haunts Every Investor

Have you ever asked yourself: Is this the right time to buy land? Or is it better to wait until prices drop? This question troubles millions of investors worldwide, not just in Saudi Arabia. The truth is, the answer isn't simple, but it's not impossible either.

In this article, we'll take you on a scientific journey backed by studies from world-class universities and economic research centers, to understand together how to make a buy or wait decision based on real data, not just predictions or feelings.

First: Understanding Real Estate Market Cycles

Before making any decision, you need to understand that the real estate market moves in repeating cycles. This isn't theory—it's a scientifically documented fact that economists have studied for over a century.

The Four-Phase Real Estate Cycle

According to studies from the Wharton Real Estate Center at the University of Pennsylvania, the real estate market goes through four main phases that repeat cyclically. Understanding these phases is the first key to making a smart decision.

The first phase is the Recovery Phase. During this phase, the market is emerging from a previous recession. Prices are at their lowest levels, new construction has nearly stopped, and supply exceeds demand. This phase is difficult to identify because everyone still feels the effects of the recession. But it's the golden opportunity for the smart investor who buys at low prices.

The second phase is the Expansion Phase. The economy improves, jobs increase, and demand for real estate rises. Prices begin to climb, and new construction returns strongly. This is also a good phase to buy, especially at its beginning, because prices haven't reached their peak yet.

The third phase is the Hypersupply Phase. Developers build frantically to meet increasing demand, but suddenly supply exceeds demand. Prices begin to slow then decline. This is a dangerous phase to buy, and it's better to wait or sell if you own property.

The fourth phase is the Recession Phase. Supply far exceeds demand, prices fall, and rents decline. Many owners offer their properties for sale at a loss. This is a difficult phase for everyone, but it paves the way for the coming recovery.

The 18.6-Year Real Estate Cycle Theory

Economic researcher Phil Anderson studied real estate markets in the United States and Britain for more than 200 years and found an amazing pattern: the real estate market moves in cycles averaging 18.6 years. This cycle consists of approximately 14 years of growth, then 4 years of decline.

If we look at history, we find that major real estate crises occurred in 1973, 1989, and 2007, with time gaps of approximately 18 years between each crisis. This doesn't mean the timing is precise like clockwork, but it gives us an idea about long-term patterns.

Second: Opportunity Cost - What Most Investors Don't Calculate

When you decide to wait instead of buying, or buy instead of waiting, you're actually making a decision that has a cost. This cost is called "opportunity cost" in economics.

What is Opportunity Cost?

Simply put, it's the value of what you lose when you choose one option over another. If you have one million riyals and decide to buy land, you're giving up all other opportunities that this million could have achieved, such as investing in stocks, real estate funds, or even placing it in a bank deposit.

Study: Historical Real Estate Returns Compared to Other Assets

A massive study conducted by economists from the University of California, the University of Bonn, and the German Central Bank analyzed 145 years of data from 16 advanced countries. The results were surprising: residential real estate achieved annual returns of approximately 7% (including rent and value appreciation), which is very close to stock returns of about 7% as well.

But the fundamental difference is that real estate is less volatile than stocks. In other words, the returns are similar but the risks are lower in real estate.

The Real Cost of Waiting

Let's assume you decided to wait a full year before buying land for one million riyals, expecting the price to drop. What happens in different scenarios?

In the first scenario, if the price drops 10%, you'll save 100,000 riyals—an excellent decision. In the second scenario, if the price stays the same, you'll have lost a year of potential rent or benefit from the land, plus lost returns from investing the million elsewhere. In the third scenario, if the price rises 10%, you'll pay an additional 100,000 riyals, plus all the previous losses.

The problem is that most people waiting assume the first scenario always, while history tells us that prices rise over the long term more than they fall.

Study: The Cost of Waiting in the American Market

According to data from the National Association of Realtors, those who waited in 2020 to buy in 2025 found that prices rose by approximately 55%, while wages rose only 26%. This means the purchasing power of those who waited declined significantly.

Third: Time in the Market vs. Timing the Market

There's a famous quote from billionaire investor Ken Fisher: "Time in the market is more important than trying to time the market." This quote applies to real estate just as much as it applies to stocks.

Why Do Most People Fail at Timing the Market?

A study from the Zell/Lurie Real Estate Center at Wharton University showed that predicting real estate market movements is extremely difficult even for professionals. The reasons are multiple: many factors affect the market unpredictably, such as economic changes, interest rates, and government policies. Also, real estate markets are very local—what happens in Riyadh may be completely different from what happens in Jeddah or Dammam. Additionally, publicly available information is often delayed—by the time you read about price increases or decreases, it's too late to benefit from them.

The Best Strategy: Buy When You're Ready

Instead of waiting for the "perfect moment" that may never come, it's better to buy when three conditions are met: sufficient financial ability for a comfortable down payment and purchase expenses, job stability and income that ensures your ability to meet long-term commitments, and clarity in your goals whether you want the land for housing, investment, or development.

Fourth: Psychological Factors in Real Estate Purchase Decisions

Behavioral economics teaches us that humans are not completely rational beings. Our financial decisions, especially big ones like buying property, are affected by psychological factors we may not be aware of.

Status Quo Bias

A study from the Journal of Behavioral Economics showed that people tend to stay in their current situation even if changing it would be better for them. This explains why many people continue renting for many years despite their ability to buy—because the status quo seems "safer."

Fear of Missing Out

In the opposite direction, there's what's called FOMO or Fear of Missing Out. This feeling pushes people to buy quickly and at inflated prices for fear that prices will continue rising forever. This bias is dangerous because it makes you make hasty decisions without sufficient study.

The Anchoring Effect

When you see the price of a particular piece of land, that price becomes a mental "anchor" against which you measure all other prices. If you see land for one million riyals, then find another similar one for 800,000, you'll feel it's a "deal" even if the real price is 600,000.

Fifth: The Saudi Real Estate Market in 2026 - A Realistic Reading

Now that we understand global theories and studies, let's look at the Saudi reality specifically.

Current Numbers

According to recent Knight Frank reports, home prices in Riyadh have nearly doubled in just five years—an increase that Crown Prince Mohammed bin Salman has described as "unacceptable." The Saudi real estate market size is estimated at approximately $68 billion in 2024, expected to reach $96 billion by 2030 with annual growth of approximately 7%.

New Variables in 2026

The foreign property ownership law that takes effect in January 2026 will open the market to international investors for the first time on a wide scale. This may increase demand and raise prices in some areas, especially major cities and mega projects. Vision 2030 continues to drive real estate development, with massive projects like NEOM, Qiddiya, and the Red Sea Project. The housing supply shortage in Riyadh specifically creates pressure on prices, with 27,500 units delivered annually against demand of approximately 115,000 units.

Indicators to Monitor

Instead of trying to time the market, monitor these indicators to make a smarter decision: the price-to-annual-rent ratio—if it's higher than 20 times, the market may be overvalued. Also monitor real estate trading volume—a decrease in transactions with rising prices may be a sign of an approaching peak. Also follow mortgage interest rates—their rise reduces purchasing power and pressures prices. Finally, pay attention to vacancy rates—their rise means supply exceeds demand.

Sixth: When is Waiting the Right Decision?

Despite everything we've said about the risks of waiting, there are cases where waiting is the wise decision.

Wait if These Conditions Apply to You

Wait if your financial situation is unstable—don't buy property if it will deplete all your savings or put you under severe financial pressure. Wait also if the market is at a clear peak—when you see signs of hypersupply or unreasonable prices compared to rents and incomes, waiting may be wise. Wait also if you have better investment opportunities—if you can achieve higher returns with lower risk elsewhere, real estate isn't the only option. And wait if you're unsure about the area—buying land in an area you don't know well is a big risk.

Warning Signs of an Overheated Market

Be cautious when you see everyone talking about real estate as a guaranteed investment, or when multiple offers compete for the same property at prices higher than asked, or when the quality of offered properties decreases while prices rise, or when banks ease financing conditions unusually to stimulate buying.

Seventh: When is Buying the Right Decision?

On the other hand, there are conditions that make buying now an excellent decision.

Buy if These Conditions Apply to You

Buy if you have comfortable financing that allows you to pay at least 20-30% down while keeping an emergency fund. Buy if you find a strategic location—prime locations near major projects or metro lines or developing areas are rare. Buy if your goal is long-term—the longer you hold the property, the less important buying timing becomes. Buy if rents are high in your area—high rents mean the cost of waiting is high too.

Smart Buying Strategy

Instead of trying to buy the "perfect" land at the "perfect" price, focus on buying "good" land at a "reasonable" price that you'll hold for a long time. This strategy has historically proven more successful than timing attempts.

Eighth: How to Make Your Final Decision?

Here's a practical framework for making a studied decision.

Step One: Honestly Evaluate Your Financial Situation

Ask yourself: Can I pay the down payment without depleting my savings? Is my income stable and can I commit to installments for years? Do I have an emergency fund covering at least 6 months of my expenses?

Step Two: Study the Local Market

Don't rely on general news. Research the specific neighborhood you want to buy in. What were prices a year ago? Two years ago? What's the occupancy rate? Are there upcoming development projects?

Step Three: Calculate the Opportunity Cost

Compare the buy-now scenario with the wait scenario. What's the worst that could happen in each scenario? And what's the best that could happen? Make your decision based on what risk you can tolerate.

Step Four: Consult Experts

Talk to trusted real estate brokers, financial advisors, and people who own properties in the area you're targeting. Practical experience is priceless.

Step Five: Don't Rush and Don't Delay

Give yourself enough time to study, but set a deadline for making the decision. Rushing is wrong, but excessive analysis leading to paralysis is also wrong.

Frequently Asked Questions

Is it better to buy land or a ready apartment or villa?

Land suits those who want to hold long-term or build according to their wishes. Ready properties suit those who want immediate rental income or to live in directly. Both are good investments depending on your goals.

Will land prices in Saudi Arabia drop soon?

No one can be certain. Current indicators of supply shortage, increased demand, and Vision 2030 projects point to continued pressure on prices, but markets always have surprises.

What are the best areas for land investment currently?

Areas near metro stations in Riyadh, areas surrounding major projects, and developing neighborhoods on the outskirts of major cities. But every investment needs special study.

Is real estate financing now suitable or should I wait for interest rates to drop?

As experts say: "Buy the house at current interest rates, then refinance if rates drop later." Waiting for interest rates to drop may mean rising property prices, so you lose on one side what you save on another.

What's the ideal period to hold land before selling?

Studies indicate that a period of 5-10 years gives a good opportunity to benefit from market cycles and value appreciation. But this varies depending on location and market conditions.

Conclusion

The decision to buy land or wait is not a decision made based on emotions or friends' advice. It's a decision that requires understanding market cycles, calculating opportunity cost, and awareness of psychological biases that may affect us.

Global studies tell us that "time in the market" is more important than "timing the market." And whoever waits for the perfect moment may wait forever. But this doesn't mean buying recklessly—rather, buying when you're financially and psychologically ready, and after sufficient study of the local market.

In the end, the best time to buy property was 20 years ago. And the second-best time is now, if you're ready for it.