Authored by the expert who managed and guided the team behind the Saudi Arabia Property Pack
Yes, the analysis of Riyadh's property market is included in our pack
Riyadh's rental market is experiencing unprecedented growth as the city transforms under Vision 2030.
Average monthly rent for apartments ranges from SAR 3,185 in outer areas to SAR 4,100 in the city center, but premium neighborhoods like Al-Hamra and Al-Bawadi command SAR 6,000-12,000 monthly. North Riyadh offers the best rental yields at 8-12%, while West Riyadh delivers the highest returns at up to 11.3% for one-bedroom units.
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Riyadh's apartment rental market shows strong fundamentals with average monthly rents of SAR 3,185-4,100 for one-bedroom units and rental yields reaching 8-12% in prime locations.
North Riyadh neighborhoods like Al Olaya, Al Malqa, and Al Sahafa offer the best combination of tenant demand and investment returns, with vacancy rates below 10%.
| Property Type | Average Monthly Rent (SAR) | Rental Yield (%) | Best Areas |
|---|---|---|---|
| Studio | 1,600 - 6,000 | 9-12% | West Riyadh, Al Malqa |
| 1-Bedroom | 2,500 - 4,100 | 8-11% | North Riyadh, Al Olaya |
| 2-Bedroom | 3,000 - 7,000 | 8-10% | Al Sahafa, Al Yasmin |
| 3-Bedroom | 4,000 - 7,000+ | 7-9% | Al Narjis, Al Muruj |
| Villa | 10,000 - 30,000+ | 5-8% | North Riyadh compounds |
| Compound Unit | 8,000 - 20,000+ | 6-8% | Expat-focused areas |
| Short-term Rental | 313/day (40% occupancy) | Variable | Business districts |
What's the average monthly rent right now for an apartment in Riyadh?
As of June 2025, the average monthly rent for a one-bedroom apartment in central Riyadh is SAR 4,100, while units outside the city center average SAR 3,185 per month.
These baseline figures represent the mid-range market, but actual rental costs vary significantly based on specific location and property quality. Premium neighborhoods like Al-Hamra and Al-Bawadi command much higher rates, with one-bedroom apartments ranging from SAR 6,000 to SAR 12,000 monthly.
More affordable areas in West and South Riyadh offer one-bedroom units starting from SAR 2,500-3,500 per month. The rental market has shown consistent growth throughout 2024 and early 2025, with average increases exceeding 10% year-over-year.
Market dynamics favor landlords due to strong demand from expatriates, local professionals, and corporate tenants relocating to support Vision 2030 projects.
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How does rent vary depending on the type of property—like studio, one-bedroom, two-bedroom, villa, or compound unit?
Property type significantly impacts rental rates, with studios offering the most affordable entry point and villas commanding premium prices.
Studios in less central areas start from SAR 1,600-2,500 monthly, but prime locations can reach SAR 6,000 or more. One-bedroom apartments range from SAR 2,500-4,100 in central areas and SAR 2,000-3,200 outside the center.
Two-bedroom units typically rent for SAR 3,000-7,000+ depending on location and amenities, while three-bedroom apartments command SAR 4,000-7,000+ in central areas and SAR 3,500-6,000 outside the center. The jump from two to three bedrooms reflects increased demand from families and corporate housing programs.
Villas represent the luxury segment with monthly rents ranging from SAR 10,000-30,000+ based on size, location, and included amenities. Compound units, popular among expatriate families, typically rent for SAR 8,000-20,000+ monthly and often include additional services like security, maintenance, and recreational facilities.
Compound living appeals particularly to international professionals who value gated community amenities and proximity to international schools.
Which neighborhoods or districts in Riyadh offer the best value in terms of rental yield and tenant demand?
North Riyadh consistently delivers the strongest combination of rental yields and tenant demand across multiple neighborhoods.
Al Olaya, Al Malqa, Al Narjis, Al Sahafa, and Al Yasmin lead the market with rental yields between 8-12% and vacancy rates below 10%. These areas benefit from proximity to business districts, modern infrastructure, and strong expatriate presence.
West Riyadh offers the highest rental yields, reaching up to 11.3% for one-bedroom apartments, though absolute rental amounts are generally lower than North Riyadh. This creates opportunities for investors focused on yield rather than absolute returns.
Established communities like Al Hamra, Al Muruj, and Al Rabwah provide stable demand and good appreciation potential, particularly attractive to local professionals and growing families. South Riyadh remains more affordable but experiences less demand and slower price growth.
Tenant demand concentrates heavily in North Riyadh due to its business district proximity, international school access, and modern amenities that appeal to both expatriate and local professional populations.
What's the average surface area and rental price per square meter for apartments in different parts of Riyadh?
| Area | Average Size (sqm) | Purchase Price (SAR/sqm) | Rental Rate (SAR/sqm/year) |
|---|---|---|---|
| North Riyadh (Al Malqa, Al Olaya) | 120-160 | 7,000-13,500 | 100-150 |
| East/West Riyadh | 100-140 | 2,000-6,000 | 50-100 |
| South Riyadh | 80-120 | 1,500-3,000 | 40-80 |
| Premium Areas (Al Hamra) | 140-200 | 8,000-15,000 | 120-180 |
| Villa/Compound Units | 300-500+ | 3,000-8,000 | 60-120 |
What are the typical additional costs—like maintenance, management fees, taxes, or agency commissions—that landlords should factor in?
Landlords should budget for several ongoing costs beyond the basic rental income when calculating net returns.
Maintenance costs typically represent 1-2% of annual rental income for standard upkeep, repairs, and periodic renovations. Property management fees range from 5-10% of monthly rent if using professional management services, which many expatriate landlords prefer.
Agency commissions for tenant placement average 2.5-5% of annual rent, paid when securing new tenants. This cost occurs with each tenant turnover, making tenant retention valuable for reducing expenses.
Saudi Arabia does not impose VAT on residential rentals, though commercial properties face VAT obligations. Landlords may cover building maintenance fees or common area expenses in apartment complexes, typically SAR 200-800 monthly depending on amenities.
Utility costs are usually tenant responsibilities, but some landlords include basic services in compound rentals to attract premium tenants and justify higher rents.
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How do short-term rental options (like Airbnb) compare to long-term leases in terms of profitability, occupancy, and regulations?
Short-term rentals in Riyadh show mixed performance compared to traditional long-term leasing strategies.
Airbnb and similar platforms achieve median occupancy rates of 40% (approximately 146 nights annually) with average daily rates of SAR 313, generating roughly SAR 46,000 annual revenue for typical units. This performance varies significantly by location and property quality.
Long-term leases offer more predictable income streams with occupancy rates exceeding 90% in prime areas and lower management overhead. Rental yields of 8-12% for well-located properties often exceed short-term rental net returns after accounting for higher operating costs.
Short-term rentals require more intensive management including guest communication, cleaning coordination, and property maintenance. They also face seasonal demand fluctuations and potential regulatory changes as the market evolves.
Current regulations for short-term rentals remain informal, requiring compliance with general hospitality and safety standards. Long-term leases benefit from established legal frameworks and tenant protection laws that provide clearer operating guidelines.
Can you give some real examples of rental prices for different types of properties in Riyadh, including budget, mid-range, and luxury?
Real market examples demonstrate the wide range of rental opportunities across Riyadh's diverse neighborhoods and property types.
Budget options include studios in West Riyadh renting for SAR 6,000-10,000 annually (SAR 500-833 monthly), appealing to students and young professionals. Entry-level one-bedroom apartments in similar areas start around SAR 2,000-2,500 monthly.
Mid-range properties like two-bedroom apartments in Al Narjis command approximately SAR 80,000 annually (SAR 6,666 monthly), offering good value for families and sharing professionals. Three-bedroom units in established neighborhoods like Al Rabwah typically rent for SAR 4,500-6,000 monthly.
Luxury properties showcase Riyadh's premium market, with three-bedroom apartments in Al Muhammadiyah reaching SAR 170,000 annually (SAR 14,166 monthly). Four-bedroom villas in North Riyadh compounds range from SAR 180,000-300,000 annually (SAR 15,000-25,000 monthly).
Premium compound units with full amenities can exceed SAR 20,000-25,000 monthly, particularly those catering to senior executives and diplomatic personnel.
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What do vacancy rates look like by neighborhood and property type, and how long does it typically take to find a tenant?
Vacancy rates vary significantly across Riyadh's different districts, with prime locations maintaining very low vacancy levels.
North Riyadh neighborhoods including Al Olaya, Al Malqa, and Al Sahafa maintain vacancy rates below 10%, reflecting strong and consistent tenant demand. These areas typically require 2-4 weeks to secure new tenants for well-priced properties.
West Riyadh experiences slightly higher vacancy rates of 10-15% due to lower absolute rental amounts and different tenant demographics. South Riyadh sees vacancy rates of 15-20%, requiring longer marketing periods and potentially more flexible rental terms.
Property type significantly influences vacancy duration, with two and three-bedroom apartments in family-friendly areas renting faster than studios or large villas. Compound units maintain low vacancy rates due to limited supply and strong expatriate demand.
Seasonal factors affect rental timing, with higher demand during autumn and spring months when expatriate families typically relocate. Properties priced competitively for their location and condition generally secure tenants within the expected timeframes.
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What kinds of renters are active in Riyadh—expats, locals, families, students, or corporate tenants—and what do they typically look for?
Riyadh's rental market serves diverse tenant segments with distinct preferences and requirements.
Expatriate professionals comprise approximately 40% of the rental market, strongly preferring gated compounds, furnished units, comprehensive security, and proximity to international schools. They typically seek turnkey solutions with included amenities and maintenance services.
Local professionals represent 35% of tenants, increasingly choosing modern apartments over traditional housing. They value privacy, adequate parking, and newer developments, particularly in North Riyadh's business districts.
Corporate tenants account for 25% of the market, leasing multiple units for staff accommodation. They prefer central business district locations, high-specification properties, and furnished options with flexible lease terms.
Families prioritize space, safety, and proximity to quality schools, while students focus on affordability and transportation connections. Each segment influences different neighborhoods and property types, creating varied investment opportunities across the city.
What are the average gross and net yields by property type and location, and what are currently considered the smartest investments?
Rental yields in Riyadh significantly outperform many regional markets, with gross yields ranging from 8-12% for apartments in high-demand areas.
After accounting for management fees, maintenance costs, and occasional vacancy periods, net yields typically range from 6-10% for well-managed properties. North Riyadh consistently delivers the strongest performance with yields at the higher end of this range.
Mid-range apartments in Al Olaya, Al Malqa, Al Sahafa, and Al Yasmin represent the smartest investments, offering optimal balance between yield potential and tenant demand. These properties appeal to both expatriate and local professional markets.
Villas and luxury properties generate lower yields of 5-8% but may offer better long-term appreciation potential. Studio apartments can achieve higher yields but face more tenant turnover and management complexity.
The current investment sweet spot focuses on two and three-bedroom apartments in North Riyadh's established neighborhoods, where strong rental demand meets reasonable acquisition costs and manageable operating expenses.
How have rental prices and yields changed compared to one year ago and five years ago?
Riyadh's rental market has experienced substantial growth, particularly accelerating through 2024 and into 2025.
Rental prices increased by over 10% during 2024, driven by strong demand from Vision 2030 projects and limited new supply in prime locations. This growth rate significantly exceeds inflation and demonstrates the market's fundamental strength.
Five-year trends show even more dramatic improvement, with rental yields steadily increasing due to population growth, economic diversification, and infrastructure development. Areas like North Riyadh have seen compound annual growth rates exceeding 8-10% over this period.
Compared to regional competitors, Riyadh's rental costs remain 25-50% lower than Dubai's equivalent properties, though this gap is narrowing as demand intensifies. Yields in Riyadh consistently exceed those available in Dubai or Jeddah.
The market transformation reflects Saudi Arabia's broader economic evolution, with rental property investment becoming increasingly attractive as traditional investment options face greater volatility.
What are the short-, medium-, and long-term forecasts for rental prices and yields in Riyadh, and how do they compare to similar cities like Dubai or Jeddah?
Market forecasts for Riyadh remain strongly positive across all time horizons, supported by fundamental economic and demographic trends.
Short-term projections for 2025-2026 anticipate continued rental growth, especially in North Riyadh, due to sustained demand and constrained supply in prime locations. Annual growth rates of 8-12% appear sustainable given current market dynamics.
Medium-term forecasts through 2030 expect stable or slightly increasing yields as new developments begin addressing supply constraints while demand remains robust from Vision 2030 implementation. Market maturation should reduce volatility while maintaining attractive returns.
Long-term outlook beyond 2030 projects sustained high yields supported by population growth, economic diversification, and Riyadh's emergence as a regional business hub. The market is forecast to outperform Dubai and Jeddah in yield generation and stability.
Comparative analysis shows Riyadh offering superior yield potential versus Dubai's lower yields but higher absolute rents, while significantly outperforming Jeddah across all metrics. This positioning makes Riyadh particularly attractive for yield-focused investors.
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Conclusion
This article is for informational purposes only and should not be considered financial advice. Readers are advised to consult with a qualified professional before making any investment decisions. We do not assume any liability for actions taken based on the information provided.
Riyadh's rental market offers compelling opportunities for both investors and tenants, with strong fundamentals supporting continued growth.
North Riyadh neighborhoods provide the optimal combination of rental yields, tenant demand, and long-term appreciation potential, making them the prime target for property investment in the capital.
Sources
- Numbeo - Cost of Living in Riyadh
- Arab MLS - Average Rent in Saudi Arabia
- Bayut - Apartments for Rent in Riyadh
- Arab MLS - Renting in Saudi Arabia
- Real Estate Saudi - Living in Villas and Apartments
- Sands of Wealth - Riyadh Real Estate Forecasts
- Sands of Wealth - Best Areas in Riyadh
- Sands of Wealth - Buy to Rent Out in Saudi Arabia
- AGBI - Saudi City Rental Yields
- Airbtics - Airbnb Revenue in Riyadh