Saudi Arabia considers rent cap as part of major real estate reforms

Dubai: Saudi Arabia is considering a cap on residential and commercial rent increases as part of a broader strategy to stabilise property prices, Abdullah Al Hammad, CEO of the Real Estate General Authority (REGA), has confirmed.

The initiative, led by Crown Prince Mohammed bin Salman, is designed to rebalance the real estate market in Riyadh and ensure fair access to housing.

A key component of this plan is the finalisation of a new White Land Tax law, which aims to increase housing supply and curb rising property and rental costs.

“The Crown Prince’s directives prioritise expanding supply by lifting development restrictions in northern Riyadh, releasing new plots, regulating lease agreements, and ensuring ongoing market oversight,” Al Hammad stated.

As part of these efforts, authorities have lifted the ban on transactions —including sales, purchases, subdivisions, and permits — on 81 million square meters of land in northern Riyadh. This move is expected to ease supply constraints and encourage new residential development.

The Royal Commission for Riyadh City has been tasked with delivering between 10,000 and 40,000 planned residential plots annually over the next five years, priced at no more than SR1,500 per square meter.

Eligible Saudi citizens, including married individuals or those over the age of 25, will have access to these plots under conditions preventing resale or transfer for 10 years, except for construction financing.

Other reforms include new landlord-tenant regulations to ensure fair rental agreements, while REGA and the Royal Commission will monitor property prices and submit regular reports to maintain market stability.