Saudi Arabia is considering implementing caps on the rents of both residential and commercial properties.
According to a report in the Saudi Gazette, this move aims to address the rising rent prices. Abdullah Al Hammad, the CEO of the Real Estate General Authority (REGA), confirmed this on Tuesday, April 1.
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This initiative is part of an effort led by Crown Prince and Prime Minister Mohammed bin Salman to rebalance the real estate market in Riyadh, Al Hammad emphasized while speaking to Al Arabiya.
“The Crown Prince’s directives focus on increasing supply by lifting development restrictions in the northern parts of the capital, releasing new plots, regulating lease agreements, and maintaining regular market oversight,” Al Hammad said.
The initiative also includes the finalisation of the new White Land Tax law, which aims to boost housing supply and curb the rise in property and rental prices.
Saudi authorities have also lifted the ban on transactions related to sales, purchases, subdivisions, and permits for 81 million square meters of land in northern Riyadh. This move is designed to ease supply constraints and encourage new residential development.
Increase in provision of residential plots
The Royal Commission for Riyadh City has also been tasked with providing between 10,000 and 40,000 planned and developed residential plots annually over the next five years, depending on demand.
Prices of the plots
The prices of these plots are capped at SR1,500 per square meter for eligible Saudi citizens, including married individuals and those over the age of 25, with specific conditions prohibiting resale or transfer for 10 years unless for financing construction.
Other reforms to be introduced include new regulations to govern landlord-tenant relations and ensure fair terms for both parties.
REGA and the Royal Commission will also be responsible for monitoring property prices and submitting regular reports to the concerned authorities.
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