In a significant move aimed at stabilizing the housing market, Saudi Arabia has enacted a five-year freeze on rent increases across both residential and commercial properties in Riyadh. This measure, effective from September 25, 2025, follows a royal decree and reflects the government’s commitment to managing housing costs in the capital. The action is part of a broader initiative to address pressing economic conditions and enhance the quality of life for residents, ensuring that affordable housing remains accessible.
The Council of Ministers endorsed the rental freeze after receiving directives from Crown Prince and Prime Minister Mohammed bin Salman. As reported by the Saudi Gazette, these reforms are intended to tackle the rising rental prices that have been a growing concern for residents in Riyadh.
Under the new regulations, any increase in rental values for properties located within Riyadh’s urban boundaries is strictly prohibited for the next five years. This policy applies to both existing leases and new contracts, providing much-needed stability for renters. Additionally, the Real Estate General Authority has the authority to extend these regulations to other cities and regions with the approval of the Council of Economic and Development Affairs.
Rental Agreements and Market Stability
In a further effort to regulate the rental market, vacant properties in Riyadh will be assigned rents based on the value of the most recent registered contract. For properties that have never been rented, landlords and tenants are free to negotiate the initial rental amount. Additionally, it is mandatory for all rental agreements to be registered on the “Ejar” platform, providing a transparent and accessible system for both parties. A 60-day period has been established for tenants and landlords to raise any objections regarding the contract data.
Enforcement and Compliance Oversight
The new legislation includes automatic renewal processes for lease agreements, which will renew by default unless either party provides a 60-day notice before the contract’s expiration. In Riyadh, landlords are compelled to renew leases if tenants wish to continue, with exceptions outlined for non-payment, safety-related structural defects, or the landlord’s personal usage of the property. Moreover, landlords can challenge the fixed rental amounts under limited circumstances, such as following property renovations or if the previous lease was established prior to 2024.
Enforcement of these regulations will involve substantial oversight from the Real Estate General Authority, working alongside other governmental units to monitor compliance and rental rate adjustments. Violations of the rent freeze may incur fines of up to twelve months’ rent, along with compensation for affected tenants. As an incentive for whistleblowers, a portion of the fines—up to 20%—will be awarded to individuals who report violations.
Reflecting on the directives of the Crown Prince, officials have stated that this initiative represents a crucial shift in Riyadh’s rental dynamics. The government is committed to ensuring fairness and transparency within the rental market while fostering an environment conducive to urban development and improved living standards. As these measures unfold, continuous monitoring of rental prices and market trends will be essential, aiming to sustain a balanced and equitable housing sector in Saudi Arabia’s capital.