The Saudi authorities today announced the freezing for five years of annual increases in Riyadh’s residential and commercial shopping contracts, a lack of houses that attracts many foreigners and Saudis.

The announcement on the freezing of the increases was made by a royal decree and a decision of the Council of Ministers.

According to the official Saudi SPA News Agency, these new provisions aim to “regulate the relationship between owners and tenants by responding to the challenges raised in recent years by the increase in rents and shops”.

The text states that “the annual increase in the total amount of rent or shops, existing or young, located within the perimeter of the Riyadh city, is suspended for five years since September 25, 2025”.

The capital of Saudi Arabia has more than 8.6 million inhabitants, of which almost half of them are foreigners, who play an important role in various areas of the rich in kingdom oil, the largest economy of the Middle East.

Residents complain of the increases they consider excessive and the General Statistical Authority announced last August that housing rents increased by 7.6% on a yearly basis.

The capital is mainly developing horizontal, dominated by small villas, which limits the supply to a demand that is increasing, as it is reinforced by the arrival of thousands of expatriates and Saudi -attracted to large projects.

The increase in rentals was the main factor of the 2.3% annual inflation recorded in August in the country, according to the General Statistical Authority.

Saudi Arabian Minister of Municipalities and Housing Majend Al Hogil had admitted in June that there was an increase in prices, as well as the significant gap between supply and demand in Riyadh.

“A city like Riyadh needed 120,000 to 130,000 new houses every year,” he had told the press.

Last April, authorities had also increased the annual tax on the capital’s free (non -built) plots to 10% of their value, explaining that their will to encourage the construction of new buildings and increase their home supply.