The Saudi capital underwent an unprecedented structural shift in its real estate market in 2025, driven by a forward-looking agenda led by Prince Mohammed bin Salman, Crown Prince and Prime Minister. Far from incremental regulation, the year’s measures amounted to a deep corrective overhaul aimed at dismantling long-standing distortions, breaking land hoarding, expanding affordable housing supply, and firmly rebalancing landlord-tenant relations.
Together, the decisions ended years of speculation fueled by artificial scarcity and pushed the market toward maturity, one grounded in real demand, fair pricing, and transparency.
Observers dubbed 2025 a “white revolution” for Saudi real estate. The reforms severed the link between property and short-term speculation, restoring housing as a sustainable residential and investment product. Below is a detailed outline of the most significant of these historic decisions:
1- Unlocking land, boosting supply
In March, authorities lifted restrictions on sale, subdivision, development permits, and planning approvals for 81 million square meters north of Riyadh. A similar decision in October freed another 33.24 million square meters to the west.
The Royal Commission for Riyadh City was also mandated to deliver 10,000 - 40,000 fully serviced plots annually at subsidized prices capped at SAR 1,500 per square meter, curbing price manipulation and offering real alternatives for citizens.
2- Rent controls and contractual fairness
To stabilize households and businesses, the government froze annual rent increases for residential and commercial leases in Riyadh for five years starting in September. Enforced through the upgraded “Ejar” platform, the move halted arbitrary hikes while aligning growth with residents’ quality of life.
3- Tougher fees
An improved White Land Tax took effect in August, extending beyond vacant plots to include unoccupied built properties. Annual fees rose to as much as 10% of land value for parcels of 5,000 square meters or more within urban limits, raising the cost of land hoarding and incentivizing prompt development.
4- Investment openness and digital governance
A revised foreign ownership regime allowed non-Saudis - individuals and companies - to own property in designated zones under strict criteria, injecting international liquidity. Transparency was reinforced by the launch of the “Real Estate Balance” platform, providing real-time price indicators based on actual transactions and curbing phantom pricing.
5- Quality and urban standards
Policy shifted from quantity to quality with mandatory application of the Saudi Building Code and sustainability standards for all new developments, ensuring long-term operational value and preventing low-quality sprawl.
Structural shift
Sector specialists told Asharq Al-Awsat the measures represent a qualitative leap in market management, moving Riyadh from a scarcity and speculation-led cycle to a balanced market governed by genuine demand, efficient land use, disciplined contracts, and transparent indicators.
Khaled Al-Mobid, CEO of Menassat Realty Co., said the reforms were timely and corrective after years of rapid price escalation. He noted early positives: slowing price growth, a return to realistic negotiations, increased supply in some districts, and better-quality offerings focused on intrinsic value rather than quick appreciation.
Abdullah Al-Moussa, a real estate expert and broker, described the steps as addressing root causes, not symptoms.
He observed a behavioral shift, especially in northern Riyadh, from “hold and wait” to reassessment, alongside calmer price momentum, renewed interest in actual development, and clearer rental dynamics.
Saqr Al-Zahrani, another market expert, told Asharq Al-Awsat that the reforms tackled structural imbalances by breaking artificial scarcity created by undeveloped land banks.
Opening vast tracts north and west and introducing market-wide indicators restored “organized abundance,” aligning prices with real demand and purchasing power without heavy-handed intervention, he remarked.
He added that recent months have seen weaker demand for raw land and stalled auctions, contrasted with rising interest in off-plan sales and partnerships with developers.
Banks, too, have reprioritized toward projects with operational viability, lifting overall supply quality despite a temporary slowdown in some transactions.
Consumers, meanwhile, are showing greater patience and interest in self-build options, signaling a maturing market awareness.
Outlook
Experts expect the effects to continue through 2027, delivering broad price stability with limited corrections in overheated locations rather than sharp declines.
Homeownership, especially among young buyers, is projected to rise as capital shifts from land speculation to long-term development.
The 2025 decisions were not short-term fixes but the launch of a new social and economic trajectory for Riyadh’s property market, redefining real estate as a housing service and value-adding investment, not a speculative vessel.
As Riyadh advances toward becoming one of the world’s ten largest city economies, its real estate reset offers a model for aligning regulation with quality of life, transparency, and sustainable growth.
