Housing rent growth in Riyadh slows to 4.5% — Asharq Al-Awsat

In Riyadh, Saudi Arabia, annual growth in residential rents slowed to 4.5% in August 2026, the lowest rate in more than three years. The share of household income spent on rent fell to about 15%, compared with more than 17.5% in September 2025, Asharq Al-Awsat reports.

Limits on rent increases

Rules governing relations between landlords and tenants in the Saudi capital came into force on November 7, 2025, and will remain in effect for five years. They provide for a freeze on annual rent increases for residential and commercial real estate within the city, and also regulate rents for vacant properties that were previously leased, contract renewals, and evictions.

These rules became part of a broader package to balance Riyadh’s real estate market. It also includes increasing the supply of land for residential development, developing a system of fees for undeveloped plots and vacant properties, and strengthening documentation and transparency in the market.

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Market activity is growing

In August, the annual growth rate of prices in the housing, water, electricity, gas and other fuels category in Saudi Arabia slowed to 3.9%, after 4.2% in July. At the same time, the number of rental agreements nationwide increased by 37% to about 446,300, compared with 325,200 in August 2025.

The value of rental agreements rose by 32% to 10.62 billion riyals, or $2.83 billion. The residential sector accounted for about 343,700 agreements, up 36% year on year; their value increased by 28% to 5.59 billion riyals.

Real estate expert Abdullah Al-Musa believes that the current figures indicate easing price pressure, although it is still too early to call the situation a full market balance. According to him, further dynamics will depend on the volume of new housing, development and financing costs, as well as housing affordability for households.