Riyadh rents after a year of stabilization... price growth slows to 4.5%

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Real estate market indicators showed a slowdown in the annual rise in housing rents to 4.5% in August 2026, at the lowest pace in more than 3 years, while the ratio of rent to household income declined to about 15%, compared to more than 17.5% in September 2025, a year after implementing rent stabilization measures in Riyadh.

These indicators come one year after the directives of Crown Prince and Prime Minister Prince Mohammed bin Salman, issued on September 25, 2025, to regulate the rental market in the capital, which included stopping the annual increase in the rental value of real estate within the urban area of ​​Riyadh for a period of 5 years, in addition to controls for renewing and documenting contracts and protecting the rights of landlords and tenants.

The slowdown in rent increases and the decline in their proportion to household income reflects a change in market indicators, in conjunction with efforts to regulate the rental relationship and increase the housing supply to keep pace with the growing demand in the capital.

In parallel with regulatory measures, the Ministry of Municipalities and Housing’s efforts are directed at addressing the real estate supply gap, as it is one of the most prominent challenges associated with long-term market stability.

The Minister of Municipalities and Housing, Majid Al-Hogail, had confirmed that Riyadh needs about 360,000 housing units to meet the demand, while the market naturally pumps between 50 and 60 thousand units, and the National Housing Company provides up to 40 thousand units.

The Minister referred to the “Building for Rent” program, which is implemented by the National Housing Company in cooperation with a number of real estate developers, with the aim of increasing the units allocated for rent and expanding the housing options for residents.

These plans gain importance with the population, economic and urban growth that Riyadh is witnessing, and the accompanying high demand for housing units from families and workers moving to the capital.

Efforts to increase supply include stimulating the development of undeveloped land, through measures linked to fees for white land and vacant properties.

The Minister of Municipalities and Housing had indicated the opening of undeveloped lands north of Riyadh with an area of ​​approximately 81 million square metres, in addition to regulating white land fees, with the aim of stimulating real estate development and raising the efficiency of utilizing lands within the urban area.

The expected impact of these measures is linked to the rapid conversion of available land into projects and housing units, which contributes to increasing supply and expanding options for tenants.

At the level of regulating the rental relationship, the provisions applied in Riyadh stipulated stopping the annual increase in the rental value of the properties covered by the regulation for a period of 5 years, and fixing the rent of vacant units that had previously been rented according to the value of the last registered contract.

The measures also included organizing the automatic renewal of contracts and enhancing their documentation through the “Ejar” network, which defines the rights and obligations of both parties and gives tenants greater clarity regarding housing costs.

On the other hand, the rent for properties that have not been previously rented is determined by agreement between the landlord and the tenant, in accordance with the provisions regulating the market.

These controls aim to limit sudden changes in rental obligations and enhance the stability of the contractual relationship, in parallel with preserving the rights of property owners.

As rent regulation measures enter their second year, the expansion of housing supply is emerging as a key factor in sustaining market stability, in addition to the continued application of regulatory controls.

Attention is turning to the ability of new residential projects and real estate development programs to keep pace with the increasing demand in Riyadh, and to provide various options that suit the needs of families and their income levels.

Despite the slowdown in the pace of rent increases and the decline in their relative burden on families, the sustainability of these indicators remains linked to the volume of new supply and the development of demand over the coming years.