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Saudi Arabia Implements Real Estate Regulations to Stabilize Riyadh’s Market

The Saudi capital, Riyadh (SPA)
The Saudi capital, Riyadh (SPA)
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Saudi Arabia Implements Real Estate Regulations to Stabilize Riyadh’s Market

The Saudi capital, Riyadh (SPA)
The Saudi capital, Riyadh (SPA)

Amid rapid growth in Saudi Arabia’s real estate sector, fueled by the country’s economic diversification strategy, Crown Prince Mohammed bin Salman has introduced a series of regulatory measures in Riyadh. These steps aim to balance the capital’s real estate market, demonstrating the leadership’s commitment to providing sustainable and effective solutions for challenges in this vital sector.

Experts told Asharq Al-Awsat that rising property prices remain one of the biggest challenges in the real estate market. According to the General Authority for Statistics (GASTAT), the Real Estate Price Index increased by 3.6% in Q4 2024—the highest quarterly growth in six quarters—mainly driven by the residential sector, which accounts for 72.7% of the index.

Several factors are contributing to rising prices, including high demand for housing in major cities, large-scale development projects attracting investment, and improvements in infrastructure that increase property values.

Following an in-depth study by the Royal Commission for Riyadh City and the Council of Economic and Development Affairs, the Crown Prince’s directives focus on increasing housing supply and regulating market fluctuations to ensure fairness and stability.

Key Real Estate Measures

The newly announced policies include lifting restrictions on real estate transactions and development in several areas of Riyadh, covering 81.48 square kilometers. To meet housing demand, authorities plan to allocate between 10,000 and 40,000 residential plots annually over the next five years, with a price cap of SAR1,500 per square meter. Priority will be given to married citizens and individuals over 25 who do not own property, with applications processed through a new digital platform developed by the Royal Commission for Riyadh City.

To prevent speculative trading, new regulations restrict the sale, leasing, or mortgaging of land for ten years, except for construction financing. If a project is not completed within this period, the land will be reclaimed at its original purchase price.

Minister of Municipal, Rural Affairs, and Housing Majid Al-Hogail emphasized that these measures will help balance supply and demand while also revising the White Land Tax program to encourage property development. He also confirmed a comprehensive review of rental regulations, with amendments expected within 90 days.

Strong Demand for Real Estate

A report by JLL, a global real estate services firm, highlighted that despite a slowdown in construction projects across the Middle East and Africa in 2024, Saudi Arabia remained a strong performer. The Kingdom accounted for SAR29.5 billion in construction contracts, with significant activity in the hospitality, mixed-use, and entertainment sectors. The residential sector also performed well, with SAR7.9 billion in awarded contracts.

As Saudi Arabia prepares to host major global events, it may face challenges related to capacity and rising costs between 2025 and 2028. However, the government is addressing these issues by localizing industries, expanding infrastructure investments, accelerating digital transformation, and implementing regulatory reforms, with a focus on renewable energy and sustainability.

JLL’s Head of Projects and Development Services in Saudi Arabia, Maroun Dib, noted that strategic projects under Vision 2030 will continue attracting massive investments, creating expansion opportunities in the real estate sector. He added that major events like the FIFA World Cup and Expo will drive significant capital inflows, strengthening infrastructure development and setting the real estate sector on a solid growth trajectory beyond 2025.

Speaking to Asharq Al-Awsat, Khaled Al-Mobayed, CEO of Manassat Real Estate, stressed the importance of increasing housing supply to meet growing demand. He warned that failing to do so could lead to rising rental prices. Al-Mobayed suggested that expanding real estate development into smaller cities near major urban centers could ease pressure on large cities while providing affordable housing options.

Riyadh’s hospitality sector is experiencing rapid growth, driven by business tourism and international events. Average hotel room rates rose by 13.3% in 2024 to SAR239 per night, with 2,312 new hotel rooms expected in 2025. In Jeddah, religious and leisure tourism remains strong, supporting long-term growth despite minor market fluctuations.

Meanwhile, the retail sector in Riyadh is shifting toward experiential shopping, as consumers seek entertainment-driven retail experiences. Traditional shopping malls—especially enclosed malls—are facing declining occupancy rates. While large malls saw a 1.8% increase in lease rates in Q4 2024, community malls experienced stronger growth at 5.5%, whereas regional malls declined by 9.3%. A similar trend is visible in Jeddah, highlighting the need for more diverse and interactive retail spaces.

Industrial and Logistics Sectors on the Rise

Rising rental rates in the industrial and logistics sectors in Riyadh and Jeddah indicate strong market demand, fueled by economic diversification and the growth of e-commerce.

Additionally, the data center sector is rapidly expanding, driven by 5G technology and artificial intelligence. Riyadh, Dammam, and Jeddah now rank third in the Middle East and Africa for operational co-location data centers, contributing 12.6% of the region’s total IT capacity (1,050 megawatts) by the end of 2024. This positions Saudi Arabia for further digital infrastructure expansion.

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Oil Climbs and Equities Sink amid Mixed Messages on 'Talks'

FILE PHOTO: An oil refinery in the Keihin Industrial Zone in Kawasaki, south of Tokyo, Japan March 17, 2026. REUTERS/Issei Kato/File Photo
FILE PHOTO: An oil refinery in the Keihin Industrial Zone in Kawasaki, south of Tokyo, Japan March 17, 2026. REUTERS/Issei Kato/File Photo
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Oil Climbs and Equities Sink amid Mixed Messages on 'Talks'

FILE PHOTO: An oil refinery in the Keihin Industrial Zone in Kawasaki, south of Tokyo, Japan March 17, 2026. REUTERS/Issei Kato/File Photo
FILE PHOTO: An oil refinery in the Keihin Industrial Zone in Kawasaki, south of Tokyo, Japan March 17, 2026. REUTERS/Issei Kato/File Photo

Oil prices jumped and equities fell Thursday as investors tracked developments in the Middle East amid hopes that US and Iranian officials will bring an end to a conflict that has ramped up fears of an unprecedented global energy crisis.

Markets have been buoyed since late Monday after Donald Trump backed down on a threat to destroy Iran’s energy infrastructure and said the two sides were in peace talks.

But while crude prices are down from last week and the mood on trading floors has been better than most of March, uncertainty and the virtual closure of the Strait of Hormuz -- through which around 20 percent of oil and gas passes -- continue to cast a dark shadow.

Washington presented a 15-point plan to end the war, including Iran giving up its enriched uranium and opening up the waterway, while Tehran's state-run TV reported officials had put forward their own five conditions for hostilities to end.

Trump on Wednesday threatened to "unleash hell" if Iran did not strike a deal, but Foreign Minister Abbas Araghchi said his country does not intend to negotiate.

But the US president also said Iran was taking part in peace talks and the denials were because negotiators feared being killed by their own side.

"Pressure on energy prices, shipping flows and broader financial conditions remains one of the few meaningful sources of leverage (Iran) retains," said Saxo Markets' Charu Chanana.

"There is therefore little incentive to relinquish that leverage prematurely, particularly if market stress strengthens its negotiating position.

However, she added: "It would be imprudent to assume diplomacy is absent simply because it is not visible. In conflicts of this nature, public rhetoric and private negotiation often diverge materially.

"Markets understand this dynamic, and they also tend to inflect before the political endgame is formally in place."

With investors holding on to hope that a deal can be struck, oil prices have stabilized this week, with Brent just above $100 and WTI around $90.

Both contracts rallied Thursday.

Stocks in Wall Street and Europe rose but Asian markets struggled after a two-day rally.

Tokyo, Hong Kong, Shanghai, Seoul, Sydney, Taipei, Singapore, Manila, Bangkok and Jakarta fell along with London, Paris and Frankfurt.

City Index's Fiona Cincotta said for any recovery to gain traction, "investors will want to see clearer signs of de-escalation, including the reopening of the Strait of Hormuz".

Her remarks come after the head of the International Chamber of Commerce, John Denton, warned the conflict could cause the "worst industrial crisis" in decades.

"The head of the International Energy Agency has warned that the world is facing an energy crisis more severe than the oil shocks of the 1970s," he added.

"From a business perspective, we believe this could yet become the worst industrial crisis in living memory."

Meanwhile, the World Trade Organization said disruptions to fertilizer supplies posed a double threat to global food security through scarcity and high prices, with a third of the global fertilizer supply normally transiting the Strait of Hormuz.

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EU to Vote on Trump Tariff Deal -- but Eyes Rest of World

The European Parliament will vote on whether to cut EU tariffs on some US imports. CHARLY TRIBALLEAU / AFP/File
The European Parliament will vote on whether to cut EU tariffs on some US imports. CHARLY TRIBALLEAU / AFP/File
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EU to Vote on Trump Tariff Deal -- but Eyes Rest of World

The European Parliament will vote on whether to cut EU tariffs on some US imports. CHARLY TRIBALLEAU / AFP/File
The European Parliament will vote on whether to cut EU tariffs on some US imports. CHARLY TRIBALLEAU / AFP/File

European Union lawmakers are on track to give a green light -- with conditions -- Thursday to the bloc's tariff deal with US President Donald Trump, which Europe hopes to salvage while also racing to diversify its trade ties around the globe.

Brussels and Washington clinched the deal last summer that had set tariffs at 15 percent for most EU goods.

But Trump's 2025 tariff blitz, including hefty levies on steel, aluminium and car parts, has jolted the 27-country bloc into cultivating trade ties around the world.

From deals signed with South America to Australia, the EU has its eyes on many prizes.

But that doesn't mean the EU intends to walk away from the 1.6 trillion euro ($1.9 trillion) relationship with its main trade partner, the United States, AFP reported.

The European Parliament is voting Thursday on whether to cut EU tariffs on some US imports -- as a first step towards implementing the 2025 deal -- but with additional safeguards.

The potential green light comes after months of delay as lawmakers resisted approving the accord due to transatlantic tensions over Greenland -- and then put it on hold again following the US Supreme Court's ruling striking down Trump's levies.

The ball started rolling again after the European Commission, in charge of EU trade policy, said it would stick to the pact despite the US ruling and called on lawmakers to do the same, having received reassurances from Washington.

Trump, however, retaliated after the ruling with a new tariff regime -- pushing EU lawmakers to tighten the existing agreement with numerous safeguards.

- Losing access to US energy? -

Lawmakers leading on trade have added several provisions: making an EU tariff reduction automatically lapse in March 2028, and tying tariff cuts on steel and aluminium goods to similar reductions by the US side.

Not all members of the parliament are convinced. French EU lawmakers from the centrist Renew group have said they will vote against the agreement.

"The only political value this agreement had to offer was stability and predictability, even if many say it's an unfair deal. If it no longer even provides predictability, there's no reason to support the deal, even if it has been improved," said MEP Pascal Canfin.

The United States has urged the bloc to implement the agreement.

Washington's ambassador to the EU Andrew Puzder told the Financial Times that if the bloc delayed further, it risked losing "favorable" access to US liquefied natural gas at a time when the Middle East war has led to surging energy costs.

Before the US tariff deal is implemented by the bloc, it still needs to be negotiated with EU member states -- although Brussels hopes talks will go quickly.

- 'Trump factor' -

It is the EU's vulnerability to the consequences of wars and other shocks that has pushed Commission chief Ursula von der Leyen to make diversifying trading partners a priority, to cut overdependence on the United States and China.

The frenzy began with a long-awaited accord signed with the South American Mercosur bloc in January. Weeks later, Brussels struck another pact with India and just this week clinched a stalled deal with Australia.

"The Trump factor sped up their conclusion, for us as well as for our partners," economist Andre Sapir said.

Spurred by Trump, Sapir said, the EU has been pushing to create the world's largest network of free trade areas -- a strategy with a "defensive dimension" allowing it to resist trade "coercion".

"This free trade network carries weight in our discussions with the two giants, the United States and China," he said.

"These agreements are part of our arsenal," Sapir, of the Bruegel think tank, added. "Our strategic weapons in the international order."

Business

China Shipping Giant Cosco Resumes Bookings to Some Gulf Countries

A cargo ship operated by Cosco Shipping is docked at the foreign trade container terminal of Qingdao Port, operated by Shandong Port Group, in China's eastern Shandong province on March 25, 2026. (Photo by CN-STR / AFP)
A cargo ship operated by Cosco Shipping is docked at the foreign trade container terminal of Qingdao Port, operated by Shandong Port Group, in China's eastern Shandong province on March 25, 2026. (Photo by CN-STR / AFP)
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China Shipping Giant Cosco Resumes Bookings to Some Gulf Countries

A cargo ship operated by Cosco Shipping is docked at the foreign trade container terminal of Qingdao Port, operated by Shandong Port Group, in China's eastern Shandong province on March 25, 2026. (Photo by CN-STR / AFP)
A cargo ship operated by Cosco Shipping is docked at the foreign trade container terminal of Qingdao Port, operated by Shandong Port Group, in China's eastern Shandong province on March 25, 2026. (Photo by CN-STR / AFP)

Chinese shipping giant Cosco said on Wednesday that it was resuming new bookings for container shipments to some Gulf countries, after a three-week suspension in response to the Middle East war.

The state-owned, Shanghai-based firm was among several major shipping groups to pause operations in the Strait of Hormuz, a key waterway through which one-fifth of the world's oil and gas passes normally.

Tehran has said several times it was not targeting friendly nations, but transits through the Strait had nevertheless largely ground to a halt.

Iran said in a statement circulated by the International Maritime Organization on Tuesday that "non-hostile vessels" would be granted safe passage through the waterway.

Cosco "resumed new bookings for general cargo containers for shipments" from the "Far East" to the UAE, Saudi Arabia, Bahrain, Qatar, Kuwait, and Iraq "with immediate effect", according to a company statement.

It did not mention shipments travelling in the opposite direction, from the Gulf.

"New booking arrangements and the actual carriage are subject to change due to the volatile situation in the Middle East region," it added.

Cosco, which operates one of the world's largest oil tanker fleets, announced on March 4 that it would suspend new bookings for services for routes through the Strait of Hormuz owing to the "escalating conflicts in the Middle East region and resultant restrictions on maritime traffic".