Saudi Arabia has implemented a five-year freeze on rental prices in Riyadh, aiming to curb the sharp rise in housing and commercial rents amid rapid economic growth and urban development. The freeze, announced by Crown Prince Mohammed bin Salman, applies to both residential and commercial properties within the city’s urban boundaries, according to the state news agency SPA.
This measure is part of the broader Vision 2030 agenda, which seeks to diversify the kingdom’s economy away from oil by investing in sectors such as tourism, sports, and large-scale infrastructure projects. Much of Riyadh’s development has been fueled by the Public Investment Fund (PIF), which manages assets close to $1 trillion, driving up demand for properties and pushing rents higher.
Market data reflects the pressure on the real estate sector: villa rents in Riyadh rose 13.9% year-on-year in Q2, while apartment rents increased 6.9%, according to JLL. Since 2019, apartment prices have surged by nearly 82%, and villa sale rates have climbed almost 50%, Knight Frank reported.
Under the new regulations, rents for vacant properties will be capped at the last registered price. Landlords who violate these rules may face fines equivalent to up to one year’s rent, ensuring compliance and protecting tenants from sudden rent hikes.
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