Saudi Arabia is actively considering the implementation of rent caps for both residential and commercial properties. This potential reform is aimed at addressing the increasing rent prices across the country. Abdullah Al Hammad, the CEO of the Real Estate General Authority (REGA), confirmed this development on Tuesday, April 1, according to a report from the Saudi Gazette.

This initiative is part of a broader effort led by Crown Prince and Prime Minister Mohammed bin Salman to rebalance the real estate market in Riyadh. Al Hammad emphasized the Crown Prince’s directives, which focus on enhancing supply by lifting development restrictions in the northern areas of the capital, releasing new plots, regulating lease agreements, and ensuring continuous market oversight.

Additionally, the initiative includes the finalization of the new White Land Tax law, which is designed to increase housing supply and mitigate the rising property and rental prices. In conjunction with these efforts, Saudi authorities have lifted the ban on transactions related to sales, purchases, subdivisions, and permits for 81 million square meters of land in northern Riyadh. This measure is intended to alleviate supply constraints and promote new residential development.

The Royal Commission for Riyadh City has been tasked with providing between 10 000 and 40 000 planned and developed residential plots annually over the next five years, depending on demand. The prices of these plots are capped at SR1 500 per square meter for eligible Saudi citizens, which includes married individuals and those over the age of 25, with specific conditions that prohibit resale or transfer for 10 years unless for financing construction.

Further reforms will introduce new regulations to govern landlord-tenant relations, ensuring fair terms for both parties involved. REGA, along with the Royal Commission, will also oversee the monitoring of property prices and will be responsible for submitting regular reports to the relevant authorities.