Real Estate Reforms and Price Caps in Riyadh

Saudi Crown Prince Mohammed bin Salman has initiated significant measures to stabilize Riyadh's real estate market, addressing rising land prices and rental costs. These actions follow a comprehensive study by the Royal Commission for Riyadh City (RCRC) and the Council of Economic and Development Affairs, identifying challenges within the city's housing sector.

Key among these measures is the lifting of restrictions on land transactions and development in two strategic northern areas of Riyadh, totaling 33.2 square kilometers. This allows for land sales, purchases, divisions, subdivisions, and building permit issuance. The first area spans 17 square kilometers, while the second covers 16.2 square kilometers. This adds to the previously unrestricted 48.28 square kilometers, bringing the total land available for development to 81.48 square kilometers.

To further alleviate the housing crisis, the RCRC will provide 10,000 to 40,000 residential plots annually over the next five years. These plots will be sold at a capped price of 1,500 riyals per square meter, exclusively for eligible Saudi citizens. Strict regulations will be enforced, preventing resale, rental, or mortgage for a decade, with ownership reverting to the government if the land remains undeveloped.

Additional reforms include amendments to the White Land Tax Law to stimulate vacant land development, expected within 60 days, and regulatory measures to balance landlord and tenant interests within 90 days. The General Authority for Real Estate and the RCRC will closely monitor real estate prices, providing regular reports to ensure the effectiveness of these reforms and long-term market stability, promoting a more accessible and sustainable real estate environment.