Real estate prices in Saudi Arabia’s capital have begun to ease, following decisive measures ordered by Prince Mohammed bin Salman, Crown Prince and Prime Minister. The directives, issued in late March, included lifting restrictions on land use, providing citizens with access to developed residential plots, introducing amendments to the White Land Tax system, and regulating the relationship between landlords and tenants.
The Crown Prince’s intervention came in response to assessments by the Royal Commission for Riyadh City and the Council of Economic and Development Affairs, which found that land and rental prices in the capital had surged to unsustainable levels over recent years.
According to data released on Sunday by the General Authority for Statistics, Riyadh’s real estate price index declined by 3.6 percent year-on-year in the second quarter of 2025. That marks a significant shift from the 10.7 percent increase recorded in the first quarter.
Nationally, the rate of increase in real estate prices also slowed, with an annual growth rate of 3.2 percent in the second quarter, down from 4.3 percent in the first.
This cooling is largely attributed to the residential sector, which saw annual price growth drop sharply to just 0.4 percent, compared with 5.1 percent in the first quarter.
Residential land prices edged up by only 0.2 percent, while villa prices increased by 3.2 percent and floor-level homes by 1.5 percent. In contrast, apartment prices fell by 0.7 percent.
Meanwhile, the commercial real estate sector surged, recording an annual increase of 11.7 percent in the second quarter - up from 2.5 percent in the first. This was largely driven by a 12.7 percent rise in commercial land prices, which account for nearly a quarter of the index.
Prices of commercial buildings and exhibition spaces also rose by 2.7 percent and 4.1 percent, respectively.
The measures introduced by the Crown Prince include lifting restrictions on buying, selling, subdividing, and developing land across more than 81 square kilometers in northern Riyadh.
The Royal Commission for Riyadh City is now working to supply between 10,000 and 40,000 serviced residential plots annually over the next five years, with a price cap of 1,500 riyals per square meter.
These plots will be made available to married citizens or individuals over the age of 25 who do not already own property, and must not be sold, rented, or mortgaged for 10 years, except for the purpose of construction financing. If construction does not occur within that timeframe, the land will be reclaimed and refunded.
In addition, the government has ordered the expedited implementation of proposed amendments to the White Land Tax system within 60 days to boost land supply. Within 90 days, regulations will also be introduced to rebalance the relationship between landlords and tenants and better protect both parties.
