Real estate market indicators show that annual growth in residential rents slowed to 4.5% in August 2026, the lowest pace in more than three years. At the same time, the share of household income spent on rent fell to about 15%, down from more than 17.5% in September 2025, one year after rent stabilization measures were introduced in Riyadh.
Year of Market Regulation
These developments come a year after directives issued by Crown Prince and Prime Minister Mohammed bin Salman on September 25, 2025, to regulate the rental market in the capital. The measures included a five-year suspension of annual rent increases for properties within Riyadh’s urban boundaries, alongside rules governing contract renewals and documentation and protecting the rights of both landlords and tenants.
The slowdown in rent growth and the reduced share of income spent on housing reflect a shift in market dynamics, coinciding with efforts to regulate the landlord-tenant relationship and expand housing supply to keep pace with rising demand in the capital.
Riyadh Needs 360,000 Housing Units
Alongside regulatory measures, the Ministry of Municipalities and Housing is working to close the housing supply gap, seen as a key challenge to long-term market stability. Minister Majed Al-Hogail previously stated that Riyadh needs approximately 360,000 housing units to meet demand, while the market naturally supplies between 50,000 and 60,000 units, and the National Housing Company provides up to 40,000 units.
The minister also highlighted the “Build to Rent” program, implemented by the National Housing Company in partnership with several real estate developers, which aims to increase the number of rental units and broaden housing options for residents. These plans take on added importance amid Riyadh’s population, economic, and urban growth, and the resulting rise in housing demand from families and workers relocating to the capital.
81 Million Square Meters of Land
Efforts to expand supply also include encouraging the development of unused land through measures related to white land fees and vacant properties. Al-Hogail previously noted the opening of undeveloped land north of Riyadh covering approximately 81 million square meters, along with the regulation of white land fees, to stimulate real estate development and improve the efficient use of land within the urban boundary.
The expected impact of these measures will depend on how quickly available land is converted into projects and housing units, contributing to increased supply and expanding options for tenants.
5Years Without Annual Increases
Under the rental regulations applied in Riyadh, annual increases in the rental value of covered properties are suspended for five years. The rent of vacant units that were previously leased is fixed according to the value of the last registered contract.
The measures also regulate automatic contract renewals and strengthen contract documentation through the “Ejar” network, defining the rights and obligations of both parties and giving tenants greater clarity on housing costs. In contrast, the rent for properties that have not been previously leased is set by agreement between the landlord and tenant, in line with market regulations. These controls aim to limit sudden changes in rental obligations, strengthen the stability of the contractual relationship, and preserve the rights of property owners.
Future of Rents in Riyadh
As the rental regulation measures enter their second year, expanding the housing supply stands out as a key factor in sustaining market stability, alongside continued implementation of regulatory controls. Attention is now focused on the ability of new residential projects and real estate development programs to keep pace with rising demand in Riyadh and provide diverse options suited to families’ needs and income levels.
Despite the slowdown in rent growth and the reduced relative burden on households, the sustainability of these indicators remains tied to the volume of new supply and the evolution of demand in the coming years.
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