Riyadh's 5-Year Rent Freeze to Tame Inflation, Support Families

Saudi Arabia’s decision to freeze rental prices in Riyadh for five years is expected to bring significant relief to households, curb inflation, and stimulate consumer spending, according to a recent report by SNB.

The move follows the Saudi Cabinet’s approval of new rental regulations, which form part of a broader package of real estate reforms championed by Crown Prince Mohammed bin Salman. SNB Capital noted that if successful, the policy may be extended to other cities across the Kingdom.

In its analysis, SNB highlighted that stabilizing rental prices will improve household disposable income, directly supporting purchasing power and boosting the retail sector. Lower operational costs are also expected to improve cash flows for businesses, especially those in consumer-facing industries.

However, the report also cautioned that the rent freeze could have a negative impact on REITs (Real Estate Investment Trusts) and real estate companies, particularly those heavily invested in Riyadh’s residential and commercial property markets.

"Approximately 53% of REIT assets are located in Riyadh," the report stated, estimating that real estate assets owned by the sector in the capital reached SAR 8.85 billion by the end of 2024.

The rent freeze complements other real estate and land reforms launched since March 2025, including: lifting the suspension of transactions on 81.5 square kilometers of land in northern Riyadh, allocating 10,000 to 40,000 land plots annually for Saudi citizens at a capped price of SAR 1,500 per square meter, and revising the white land tax to incentivize development.

These measures aim to increase housing supply, improve affordability, and reduce speculative practices in the market.