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��������’s real estate sector is experiencing a historic transformation under Vision 2030, reflecting the Kingdom’s broader drive toward sustainable and inclusive economic growth. 

Among the most pressing challenges prompting reform is the sharp surge in real estate prices—particularly in Riyadh—driven by rapid population growth, limited urban land availability, and speculative investment activity.

Over the past few years, Riyadh’s population has expanded at an annual rate of about 4 percent, reaching roughly 7 million residents. This growth has been fueled by both natural demographic trends and the steady influx of individuals relocating to the capital in search of better employment opportunities. 

The city’s booming economy, coupled with its emerging role as a regional business hub, has also attracted multinational corporations—over 660 of which have established their regional headquarters in Riyadh. 

This inflow has further intensified demand for residential and commercial spaces, placing additional pressure on an already strained property market.

The result has been a widening gap between supply and demand, making it increasingly difficult for lower- and middle-income citizens, expatriates, and small businesses to afford rents—especially in high-demand districts.

Recognizing this imbalance, the Saudi government has undertaken comprehensive policy measures aimed at improving land use efficiency, boosting supply, and curbing speculative practices. These include initiatives to unlock undeveloped “white land” in strategic areas, discourage land hoarding, and apply taxation incentives to stimulate development and construction.

A cornerstone of these reforms is the standardization of landlord-tenant agreements across both residential and commercial sectors. By setting clear legal frameworks, the government seeks to enhance transparency, strengthen accountability, and create a more balanced relationship between property owners and tenants. Central to this effort is the proposed rent stabilization measure, which would cap rent increases for a five-year period unless justified under specific regulatory conditions.

High and unpredictable rental costs have long been a major obstacle to business sustainability, often leading to early closures and stifled entrepreneurship. 

Talat Zaki Hafiz

This rent stabilization initiative is designed to protect tenants from sudden and excessive hikes—particularly in high-demand areas such as Riyadh—where soaring prices have placed a heavy burden on middle- and lower-income families. It also represents an important step toward ensuring social and economic justice by fostering fairer access to housing and reducing financial stress on households.

For businesses, especially small and medium-sized enterprises and startups, the reform carries equally significant benefits. High and unpredictable rental costs have long been a major obstacle to business sustainability, often leading to early closures and stifled entrepreneurship. 

By bringing predictability and fairness to lease agreements, the reforms enable entrepreneurs to plan with confidence, allocate resources more effectively, and focus on growth rather than survival. This, in turn, helps generate employment opportunities for Saudi citizens and supports the national goal of reducing unemployment to 5 percent by 2030.

Moreover, rent stabilization enhances Riyadh’s competitiveness as an attractive destination for both local and international investors. Predictable operating costs, transparent regulatory frameworks, and improved market stability are key factors that foreign investors consider when evaluating long-term commitments. These reforms, therefore, play a direct role in strengthening investor confidence and aligning with Vision 2030’s target of raising foreign direct investment to 5.7 percent of GDP.

Beyond the economic advantages, these reforms carry deeper social implications. By improving access to affordable housing, supporting the financial resilience of families, and nurturing the growth of local enterprises, �������� is building a more inclusive and equitable urban environment. The measures promote community stability and ensure that the benefits of development are shared broadly across society.

In essence, the Kingdom’s real estate and leasing reforms—particularly the standardization of tenancy agreements and the stabilization of rents—represent a strategic and forward-looking approach to sustainable growth. They are not merely regulatory changes but vital components of a broader national transformation aimed at balancing economic expansion with social responsibility.

By easing financial burdens, fostering entrepreneurship, and stabilizing foreign investment, these reforms directly advance Vision 2030’s objectives of creating a vibrant society, a thriving economy, and an ambitious nation. Ultimately, they will help position Riyadh among the world’s top 10 global hubs for commerce and investment—anchored in fairness, transparency, and opportunity for all.

• Talat Zaki Hafiz is an economist and financial analyst. X: @Talathafiz