Riyadh rent freeze brings relief and uncertainty
- 1 de out. de 2025
- 2 min de leitura
Saudi Arabia’s imposition of a five-year freeze on rent increases in Riyadh provides clarity for tenants and families struggling with affordability but leaves questions about the market’s future, analysts say.
Rents up 82% since 2019
Villas cost Saudis two-thirds of income
Cap could discourage investors
The average apartment in Riyadh now rents for SAR22,975 ($6,100) per year – about SAR1,915 per month, according to real estate consultancy JLL. Villas cost SAR58,607 annually, or SAR4,884 a month, data from property consultancy Knight Frank shows.
Apartment rents have risen 82 percent since 2019. In the second quarter of 2025 alone, apartment rents gained 7 percent year on year and villa rents jumped 14 percent, Knight Frank data shows.
Median Saudi household income is SAR13,655 per month, according to the kingdom’s most recent consensus from 2023, while for expatriates it falls to SAR3,657. That leaves non-Saudis spending more than half their income on an average apartment and Saudis devoting two-thirds to a villa – well above OECD affordability thresholds.
“This follows on from the bump in the White Land Tax from 2 percent to 10 percent and the release of land at SAR1,500 per square metre in the north of Riyadh,” said Faisal Durrani, head of research for Mena at Knight Frank.
“High house prices and high rents are undermining affordability. Any measure to help bridge the gulf between affordability and current market rates is a welcome move.”
Matthew Green, head of research at CBRE Mena, said the policy was not unexpected. “Dubai has a rental-cap system in place, which initially had a bit of pushback from investors but has generally been a very welcome law,” he said.
Green added that the freeze creates both clarity and uncertainty. “Occupiers are generally going to be happy here. Investors tend to maybe not like uncertainty, and what comes after that five-year period is unclear. Those who have been more reasonable in their rents may be hardest hit, while landlords who have been aggressive and charging premiums are actually more protected now.”
Mohammed Makni, assistant professor of finance and dean of the business school at Imam Muhammad ibn Saud Islamic University, said the timing was crucial.
“It will help on the social side, especially families with low income. If you want to make a budget for next year, you need to know the rents,” he said. “The timing is very important given the proximity of the World Cup and Asian Winter Games.”
Diriyah Company, one of the kingdom’s largest master developers, said it expects little disruption.
“While we don’t anticipate a material impact on the launch or performance of our residential and commercial assets, the freeze does provide additional certainty and predictability for prospective tenants and investors, which ultimately supports confidence in Diriyah and the overall real estate market in Riyadh,” a spokesperson said.
JLL estimates 5,600 new residential units were delivered in Riyadh in the first half of 2025, with a further 18,900 scheduled before the end of the year, lifting total stock to 2.3 million units for a city of 8 million people.
By Josh Corder, Edmund Bower
October 1, 2025, 3:42 PM
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