Saudi Arabia has unveiled a sweeping set of rental market reforms for Riyadh, imposing a five-year freeze on annual rent increases for both residential and commercial properties. The move, announced by the General Real Estate Authority and enacted through royal decree under the directives of Crown Prince Mohammed bin Salman, is set to take effect on September 25, 2025. Officials say these measures are designed to rein in the city’s surging rental prices, foster contractual fairness, and create a more transparent and balanced real estate market.
The rent freeze—described by the General Real Estate Authority as a landmark step—will prevent landlords in Riyadh from raising total rent values on existing or new leases for the next five years. The freeze could be extended to other cities or regions pending approval from the Council of Economic and Development Affairs, signaling a potentially broader impact across the Kingdom’s real estate landscape. According to the state-run Saudi Press Agency (SPA), this initiative is part of a wider regulatory overhaul aimed at stabilizing the rental market and addressing the acute affordability crisis facing residents and businesses in the capital.
One of the most significant aspects of the new regulations is how they tackle vacant properties. For residential and commercial units that become vacant, the new rent must match the last recorded lease value. Meanwhile, properties being leased for the first time will have their rent determined through mutual agreement between the landlord and tenant. This approach is intended to prevent opportunistic rent hikes in periods of high demand or after tenant turnover, a practice that has contributed to recent price surges.
All rental contracts—whether for new or existing leases—must now be registered on the government’s “Ejar” platform. If a landlord fails to register a contract, the tenant is empowered to request its addition. Both parties are given a 60-day window to contest contract details with the General Real Estate Authority; after this period, the contract is considered valid. This digital registration requirement is a further push toward transparency and accountability, as it provides a clear record of rental agreements and helps authorities monitor market activity.
Automatic contract renewals represent another cornerstone of the reforms. Across Saudi Arabia, rental contracts will now renew automatically unless one party provides at least 60 days’ notice before expiration. In Riyadh, landlords cannot refuse to renew a contract if tenants wish to stay—except in three specific situations: non-payment of rent, documented structural safety issues, or if the landlord or an immediate family member needs the property for personal use. This provision aims to reduce the risk of arbitrary evictions and provide greater stability for tenants.
Landlords are not left without recourse, however. They can appeal rent values if major renovations have significantly increased the property’s value, or if the last lease was signed before 2024. The Real Estate Authority will establish detailed procedures for reviewing and adjudicating such appeals, ensuring that legitimate improvements or outdated contracts can be considered fairly.
Violations of the new regulations carry significant penalties. Landlords found to be in breach may face fines of up to 12 months’ rent for the property in question, in addition to compensation for affected tenants. Notably, whistleblowers who report violations may receive up to 20 percent of the collected fines if their information leads to a final ruling. This incentive aims to encourage compliance and empower tenants to speak up about abuses.
Where the new rules are silent, the Civil Transactions Law will apply. The Cabinet retains the authority to modify the regulations based on recommendations from the Council of Economic and Development Affairs, allowing for flexibility and adaptability as market conditions evolve.
The Real Estate Authority, in cooperation with other relevant agencies, is tasked with enforcing the regulations, monitoring rental price trends, and providing regular reports—including pricing and market indicators—to the Crown Prince. The Authority will also issue guidance and clarifications to help landlords and tenants understand and comply with the new rules. "These regulations represent a pivotal step toward restoring balance to Riyadh’s residential and commercial rental markets, reinforcing fairness and transparency in contractual relationships between landlords and tenants," officials told the Saudi Press Agency.
The new framework is not an isolated policy but part of a broader strategy under Saudi Arabia’s Vision 2030 economic diversification plan. Over the past several years, the government has launched a series of initiatives to reform the real estate sector, increase housing supply, and promote homeownership. Among these is the Sakani program, introduced by the Ministry of Housing in 2018, which has facilitated over 500,000 housing units by September 2025. The program provides affordable housing solutions through direct ownership, rental units, and financing support, and has played a key role in raising homeownership rates—especially among the middle class.
Mortgage market reforms have also been critical. In 2023 and 2024, the Saudi Central Bank and Ministry of Housing worked together to expand mortgage availability, cap interest rates, and extend loan durations. These measures have made home loans more accessible, supporting both developers and homebuyers. Meanwhile, mega urban development projects like NEOM, the Red Sea Project, and Qiddiya are diversifying housing options and integrating smart city technologies, further easing urban housing pressure in Riyadh and other major cities.
The urgency behind the new rent freeze is clear. According to the General Authority for Statistics (GaStat), residential rents in Riyadh rose by an average of 15-20 percent annually between 2023 and early 2025, far outpacing income growth for many residents. Commercial rents followed a similar trajectory, driven by booming business activity and speculative investment. This rapid escalation has made affordable housing increasingly scarce, particularly in a city with a population now exceeding 8 million.
Recent developments already suggest the reforms are having an impact. In August 2025, the General Real Estate Authority reported a surge in rental contract registrations on the Ejar platform, indicating growing compliance as landlords and tenants prepare for the freeze. Enhanced transparency tools have made it easier for tenants to check market rates and file complaints, contributing to more efficient dispute resolution.
Experts say that while the rent freeze is likely to ease immediate price pressures, long-term market stability will require continued efforts to boost housing supply and regulate speculative behavior. A study by JLL Middle East, a real estate consultancy, emphasized the need for parallel initiatives in project approvals and infrastructure upgrades to meet accelerating demand. The Ministry of Housing has responded by collaborating with private developers to accelerate affordable housing projects, targeting delivery of over 100,000 units annually nationwide by 2027.
Ultimately, these reforms dovetail with Saudi Arabia’s broader efforts to create a stable, predictable, and inclusive real estate market. By curbing excessive rent hikes and ensuring clear contract terms, the government is supporting the welfare of low- and middle-income families, reducing financial stress, and encouraging longer-term tenancy. The new rules are also expected to moderate market volatility, attract investment, and support the Kingdom’s ambitious goal to raise the homeownership rate from 60 percent in 2024 to 70 percent by 2030.
With Riyadh at the heart of Saudi Arabia’s economic transformation, these bold regulatory steps may well set a precedent for other cities grappling with similar challenges—and signal a new era of fairness and stability in the Kingdom’s rental markets.
