Saudi Arabia Freezes Rent Increase in Riyadh for 5 Years

Saudi Arabia on Thursday began enforcing a five-year freeze on rental prices in the capital, Riyadh, in response to a sharp rise in housing and commercial rents amid the kingdom’s economic transformation.

Crown Prince Mohammed bin Salman ordered the freeze for both residential and commercial properties within Riyadh’s urban area, the state news agency SPA reported.

The move aligns with the broader Vision 2030 agenda, which seeks to diversify the economy away from oil by investing in sectors such as tourism and sports. Large-scale infrastructure spending—much of it driven by the Public Investment Fund (PIF), which manages close to $1 trillion—has boosted demand in Riyadh and contributed to rising real estate prices.

Market Pressures

• Rental rates in Riyadh rose 13.9% year-on-year in the second quarter for villas, while apartment rents increased 6.9%, according to JLL.
• Apartment prices have climbed nearly 82% since 2019, and villa sales rates are up almost 50% over the same period, Knight Frank reported this year.

SPA said rents for vacant properties will be fixed according to the last registered price. Landlords who breach the new housing regulations could face fines of up to one year’s worth of rent.