With Saudi Arabia’s rapid economic transformation and Riyadh’s growing status as a population and investment hub, the capital’s rental market has entered a new phase characterized by expanding activity and intensified competition for housing.
This shift, combined with rising costs, has added challenges that weigh heavily on tenants, but it has also given rise to innovative financing solutions such as paying rent monthly instead of annually, easing financial pressure without affecting overall price levels.
The real estate sector is witnessing significant expansion, supported by massive projects under “Saudi Vision 2030” such as NEOM and Qiddiya. This has concentrated housing demand in major cities, especially Riyadh. However, the growth of housing supply has lagged behind demand, particularly in the middle-income segment, where rents have risen by up to 40% over three years, while per capita GDP has declined.
The gap has widened further due to population concentration in the capital and its attraction of the vast majority of new arrivals. Between 2023 and 2024, around 1.2 million new expatriates settled in Saudi Arabia, increasing pressure on a rental market already suffering from limited supply.
In response to tenants’ liquidity challenges, alternative financing models such as monthly installment payments for rent have emerged. Startups like “Ejari” and “Rise” have introduced new solutions to restructure payment mechanisms. The founder of Ejari reported a significant increase in demand for their services, reflecting the difficulties faced by the middle class in affording housing costs in the city.
Government Intervention and Its Limits
This situation has prompted policymakers to intervene in an attempt to contain the crisis. In this context, Crown Prince Mohammed bin Salman expressed his dissatisfaction with rising rents in September 2025, describing them as unacceptable.
In a practical step, the government later announced a decision to freeze rents in Riyadh for five years, in addition to launching measures aimed at stimulating the development of vacant land and increasing the supply of residential units.
However, despite the importance of these measures in limiting potential future increases, they do not offer a fundamental solution to the advance-payment problem, which remains a challenge even with fixed prices.
Al-Shamsi, for his part, explained that the requirement to pay rent annually places a heavy burden on tenants’ cash flows, noting that the issue is not limited to the rent amount itself but also includes the timing of payment. In this context, the popularity of options such as “rent now, pay later” stands out, as they allow the cost to be spread over the year, although this usually comes with interest rates of around 15%.
