Valuation & InvestmentComparative Market Analysis
Synonyms: CMA، Sales Comparison Analysis، Market Comparables Analysis
Last updated: 2026-09-25
Short Definition
A comparative market analysis (CMA) is a study that compares a subject property with similar properties recently sold or leased in the same area, adjusting for differences in size, location, age and specification, to arrive at a realistic price range for selling, buying or renting.
Overview
A comparative market analysis (CMA) is a study that compares a subject property with similar properties recently sold or leased in the same area, adjusting for differences in size, location, age and specification, to arrive at a realistic price range for selling, buying or renting.
A CMA is a pricing tool used by brokers and investors before listing a property. Its counterpart in the International Valuation Standards is the market approach (IVS 103), which accredited valuers use in formal valuation reports and which is widely used for apartments, villas and residential land where comparable sales are plentiful. The distinction matters in Saudi Arabia: Article 3 of the Accredited Valuers Law restricts valuation to TAQEEM licensees, while the Real Estate Brokerage Law (Royal Decree M/130 of 30/11/1443H) lists real estate consultancy and analysis among the real estate services that require a licence from the Real Estate General Authority. A broker's CMA is therefore a marketing opinion for setting a price, not a valuation report that banks or courts rely on.
Data sources in the Kingdom have improved: REGA's Real Estate Indicators platform shows sale and rental transactions by city and district, and the Ministry of Justice's Real Estate Exchange shows registered deals. A sound CMA uses several recent, close comparables (typically three or more), excludes non-arm's-length deals such as sales between relatives or forced sales, and makes reasoned, documented adjustments.
⚖️ Legal Basis
There is no dedicated law on CMAs, but two laws frame them: the Real Estate Brokerage Law (Royal Decree M/130 of 30/11/1443H), whose Article 1 lists real estate consultancy and analysis among real estate services and whose Article 4 requires a licence from the Real Estate General Authority to provide them; and the Accredited Valuers Law (Royal Decree M/43 of 9/7/1433H), whose Article 3 restricts valuation to licensed valuers. Valuers apply the market approach under the International Valuation Standards adopted by TAQEEM.
💡 Practical Example
Noura wants to sell a 5-year-old, 140 m² apartment in Al-Malqa, Riyadh. Her licensed broker gathers three comparable sales in the district from the last six months: 130 m² sold for SAR 910,000 (SAR 7,000/m²), 150 m² for SAR 1,020,000 (SAR 6,800/m²), and a 145 m² unit two years newer for SAR 1,044,000 (SAR 7,200/m²). After a −2% adjustment to the third for its newer age (SAR 7,056/m²), the average is about SAR 6,950/m², roughly SAR 973,000 for Noura's apartment. The broker suggests listing at SAR 990,000 to leave room for negotiation. If the buyer needs financing, the bank will still order an independent report from an accredited valuer.
⚠️ Common Mistakes
- ✗Comparing the property with listing prices instead of completed transactions.
- ✗Using old comparables or ones from different districts without time and location adjustments.
- ✗Ignoring key differences such as floor level, view, building age, lift and parking.
- ✗Presenting a CMA to a bank or court as if it were a valuation report; these require an accredited valuer.
- ✗Relying on an outlier deal, such as a sale between relatives or a rushed sale, as the main reference.
🌍 International Differences
In the United States brokers usually prepare a CMA free of charge to price a listing, while licensed appraisers use the sales comparison approach in their reports. In Turkey it is called emsal karşılaştırma yöntemi and is common in reports by SPK-licensed valuers. In the UAE the Dubai Land Department publishes transaction data that brokers use. The principle is the same everywhere: a CMA is for pricing, while a formal valuation belongs to a licensed valuer.
FAQs
What is the difference between a CMA and a valuation report?▾
A CMA is a pricing tool prepared by a broker or investor to set an asking-price range, whereas a valuation report is issued by a TAQEEM-licensed accredited valuer under the International Valuation Standards and is relied on by banks and official bodies.
How many comparables are appropriate?▾
No law sets a number, but professional practice favours three or more recent sales in the same or a similar district, with adjustments for differences and the source of each sale documented.
Where can I find actual transaction prices in Saudi Arabia?▾
On REGA's Real Estate Indicators platform and the Ministry of Justice's Real Estate Exchange, which publish sale and rental transaction data by city and district.
Does a broker need a licence to provide market analysis?▾
Yes. The Real Estate Brokerage Law lists real estate consultancy and analysis among the real estate services that may only be provided with a licence from the Real Estate General Authority.
Does a CMA work for commercial property?▾
It works where enough comparable deals exist, but income-producing properties are usually also valued with the income approach because their value depends on rents and net income.
