In the context of the major transformations taking place in the Kingdom, driven by Vision 2030, and with the growth of the real estate market, a significant challenge has arisen as demand for real estate has increased in certain areas of the Kingdom, leading to a substantial rise in prices. Therefore, some reforms were necessary to achieve real estate balance and preserve the rights of all parties. 

In this article, we will discuss the most important of these laws, including the regulation of the relationship between landlord and tenant, and explain the importance of rental valuation. 

What are the most important guidelines for real estate balance? 

The real estate market is one of the most significant contributors to the national economy. With the progress it has achieved, the real estate sector has faced rising prices and a shortage of supply in some areas of the Kingdom. Therefore, His Royal Highness Mohammed bin Salman, Crown Prince and Prime Minister, issued some decisions to restore balance to the real estate market, namely: 

Lifting suspensions:

The suspension on the disposal of land north of Riyadh has been lifted, opening the door to purchases, sales, divisions, and subdivisions, in addition to issuing building permits and approving plans. The area of these lands is more than 1,000 square kilometers, thus contributing to urban expansion that meets the needs of the population and economic growth in the capital. 

Provision of residential land: 

The Royal Commission for Riyadh City has directed the provision of planned and developed residential land for citizens, ranging from 80,000 to 100,000 plots annually over the next five years, in order to provide sustainable housing solutions and work to increase the supply of land ready for construction. 

White land fees:

Proposed amendments to the white land fee system have been announced to stimulate the development of unused land and encourage its use within urban areas. White land refers to undeveloped land free of buildings located within urban areas owned by individuals or non-governmental entities, with an area of no less than 5,000 square meters.

The system imposes annual fees ranging from 2.5% to 10% depending on the priority of development. The white land fee system is one of the most important real estate reform tools launched by the Kingdom of Saudi Arabia to achieve a balance between supply and demand in the residential market.

Regulation of the rental relationship:

The General Rental Authority has been tasked with certain regulatory measures to regulate the relationship between landlords and tenants, including the following:

• Suspending the annual rent increase in Riyadh for residential and commercial properties starting from September 25, 2025, for a period of five years. In other cities of the Kingdom, the increase will be agreed upon between the landlord and tenant in accordance with the contract registered on the rental network. 

• The rent for properties that have already been leased will be fixed according to the value of the last lease contract, and for properties that have not been proven to be leased, the rent will be calculated according to the agreement between the landlord and tenant in the city of Riyadh. In other cities in the Kingdom, the rent is subject to supply and demand according to the agreement. 

• Landlords in Riyadh are not entitled to refuse to renew a lease except in cases of tenant default, structural defects in the property that affect the safety of the property and tenants, as confirmed by a technical report approved by the relevant government authority, or the landlord’s desire to use the residential property for themselves or a first-degree relative. In the rest of the Kingdom, the landlord has the right not to renew the lease, provided that the tenant is notified 60 days before the end of the lease. 

• The landlord may object to the rental value of the vacant property in the event of construction, structural, or substantial work that has increased its rental value, or if the last lease was before 2024, and in any other case approved by the Supreme Council for Real Estate.

These steps are part of regulatory provisions aimed at regulating the real estate market and controlling the relationship between landlords and tenants, thereby ensuring price stability, promoting residential and contractual stability, increasing transparency and reliability in transactions, and preserving the rights of all parties within a fair and sustainable legal framework.

It also ensures the provision of suitable housing options that meet the needs of citizens and contribute to the development of the Kingdom’s urban and economic infrastructure.

What is rental valuation? 

Rental valuation, also known as market rent, is defined as the fair estimated value at which a property can be rented on a specific date, between a willing landlord and tenant, under normal market conditions without any exceptional pressures or influences. This is done using valuation methods such as the market method, the income method, and the cost method, while studying the factors that affect real estate valuation. 

The importance of rental valuation lies in its pivotal role in the development and stability of the real estate market. It is an essential tool for ensuring fair prices and achieving a balance between supply and demand. Through it, the fair value of rents can be determined based on professional standards and accurate market data, which prevents price gouging or exploitation of tenants, thereby contributing to price control and increased transparency within the real estate market.

Request a valuation from Aain Real Estate Valuation Company 

You can now contact Aain Real Estate Valuation Company to request a professional valuation to accurately determine the fair value at which the property can be rented, based on approved valuation criteria and actual market data. The Aain team has a group of accredited valuers who are experienced in real estate valuation and helping buyers or investors make the best decisions. They also study the factors that affect rental value to make sure everyone’s rights are protected. 

In conclusion

These decisions and real estate reforms, which range from lifting suspensions and providing residential land to updating the white land fee system and regulating rental relationships, reflect the Kingdom’s serious commitment to achieving real estate balance and controlling prices in line with the objectives of Saudi Vision 2030.

Rental valuation is a key tool supporting these decisions, as it contributes to achieving real estate balance by determining fair rental values based on professional standards and realistic data, which helps regulators control prices and prevent exaggeration or exploitation. Contact Aain Real Estate valuation, and get an accurate and reliable valuation report that will help you make confident decisions, whether you are a landlord, tenant, or investor.