MULKIYA · GUIDES
Riyadh's Rent Freeze: What It Means for Yield Buyers
By royal order of 25-09-2025, residential and commercial rents inside Riyadh's urban boundary are frozen for five years. For income buyers, this is line one.
What the order does
By royal order dated 25-09-2025, residential and commercial rents inside Riyadh's urban boundary are frozen for five years. A landlord cannot raise the rent during the freeze. Leases renew automatically. Every lease must sit on the official leasing register, which already holds 10,000,000+ registered contracts. The freeze covers Riyadh's urban boundary, not the Kingdom: Jeddah and the rest of Saudi Arabia sit outside it.
What it does to your model
Underwrite at today's rent, not a projected one. A yield case that needs rent growth does not work in Riyadh until the freeze lifts. The rent you agree at signing is the rent you hold, so the entry price does all the work. Buy the asset cheaply enough that the frozen rent still clears your return floor. If the case only works with a rent rise in year two, walk away.
Where yields sit
Gross residential yields in Riyadh and Jeddah sit in a band of roughly 7-9%, per licensed yield data for Q1 2026. Treat the band as a range to verify per asset, not a promise. The district, the building and the tenant mix move a specific asset inside or outside the band. Under the freeze, the gross yield at purchase is close to the gross yield you keep, which makes verification at entry more important, not less.
The wider tape
The market is cooling. The official residential price index recorded -3.6% year on year for Q1 2026. Cooling prices help an entry: a lower purchase price lifts a frozen rent's yield. But they are context, not pitch. A falling index also means your exit price is not guaranteed. The freeze fixes your income; nothing fixes your capital value.
Who can buy in Riyadh
Riyadh sits inside the 100+ designated zones where foreign buyers may own. A non-resident foreign individual may buy inside the zones once three prerequisites are in place: a digital identity approved by the Ministry of Interior, a Saudi bank account in the buyer's name, and a Saudi mobile number in the buyer's name. Mulkiya is not the seller and not the broker, and it takes no commission. The honest first step is the eligibility check: seven questions about your status and your target property, answered by a deterministic rules engine against the law.
Can rents rise during the freeze?
No. Neither residential nor commercial rents inside Riyadh's urban boundary may rise for five years from the royal order of 25-09-2025. The rent fixed at signing holds through the freeze.
Does the freeze cover Jeddah?
No. The order covers Riyadh's urban boundary, not the Kingdom. Jeddah and the rest of Saudi Arabia sit outside the freeze, so Jeddah rents can still move.
What happens to existing leases?
They renew automatically, and every lease must be registered on the official leasing register. A lease already running when the order took effect stays at its current rent through the freeze.
Does the freeze change the 5% transaction tax?
No. The real-estate transaction tax stays at 5% of the price, legally the seller's liability and commonly priced into the deal. The freeze touches rent levels, not transaction taxes or fees.
What yield should I underwrite in Riyadh?
The gross residential band across Riyadh and Jeddah is roughly 7-9%, per licensed yield data for Q1 2026. Underwrite the rent the asset earns today, verify it per asset, and assume no rent growth until the freeze lifts.