Will rents keep going up in Riyadh in 2026?

Last updated on June 12, 2025

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 has experienced explosive growth, with residential rents jumping 10-23% in 2024 alone.

As we reach mid-2025, property investors and potential residents are asking whether this trend will continue through 2026. This analysis examines current market conditions, growth drivers, and potential risks to help you make informed decisions about property investment in Saudi Arabia's capital.

If you want to go deeper, you can check our pack of documents related to the real estate market in Saudi Arabia, based on reliable facts and data, not opinions or rumors.

Quick Summary:

Riyadh rents are projected to increase another 8-15% in 2026, driven by sustained population growth and limited housing supply.

Government interventions including potential rent caps and accelerated housing development could moderate growth to single digits by late 2026.

Metric	Current Status (June 2025)	2026 Projection
Residential Rent Growth	10-23% (2024)	8-15% increase
Average 3-bedroom Apartment	SAR 7,500+/month	SAR 8,500-9,500/month
Rental Yields	6-9% annually	5.5-8.5% expected
Vacancy Rate	Under 5%	7-10% in some segments
Supply Pipeline	10,000-40,000 units annually	Accelerating but insufficient
Key Growth Areas	Northern districts	Continued north/central focus

Who is the author of this content?

SANDSOFWEALTH

A team specialized in real estate investing in MENA countries (Saudi Arabia, UAE, Egypt, etc.).

We are a team of financial experts, legal professionals, developers, and local real estate specialists dedicated to helping people like you avoid mistakes when investing in real estate in a foreign place, particularly in Saudi Arabia. If you'd like to learn more about us, you can check our presentation page.

How this content was created 🔎📝

At SandsOfWealth, we explore the Saudi real estate market every day. Our team doesn't just analyze data from a distance—we're actively engaging with local realtors, investors, and property managers in cities like Riyadh, Jeddah, and Dammam. This hands-on approach allows us to gain a deep understanding of the market from the inside out.

These observations are originally based on what we've learned through these conversations and our observations. But it was not enough. To back them up, we also needed to rely on trusted resources

We prioritize accuracy and authority. Trends lacking solid data or expert validation were excluded.

Trustworthiness is central to our work. Every source and citation is clearly listed, ensuring transparency. A writing AI-powered tool was used solely to refine readability and engagement.

To make the information accessible, our team designed custom infographics that clarify key points. We hope you will like them! All illustrations and media were created in-house and added manually.

What are current rent levels in Riyadh compared to last year?

Riyadh's rental market shows significant year-over-year increases across all property types.

As of June 2025, residential rents have surged between 10-23% compared to June 2024, with the steepest increases in northern districts like Hittin and Al-Malqa. A typical 2-bedroom apartment in central Riyadh now costs SAR 5,000-6,500 per month, up from SAR 4,000-5,200 in 2024.

3-bedroom apartments in prime areas exceed SAR 7,500 monthly, compared to SAR 6,000-6,500 last year. Luxury villas in gated communities now rent for SAR 15,000-25,000 monthly, representing a 15-20% increase. Grade A office spaces saw 18-21% increases, while Grade B offices jumped 26% due to severe supply shortages.

Central business districts like Olaya and Al-Malaz experienced more moderate but still substantial 13% increases.

These significant increases reflect sustained demand from both local professionals and the growing expatriate workforce drawn to Riyadh's expanding economy.

Why have Riyadh rents increased so dramatically?

The rental surge in Riyadh stems from multiple converging factors creating unprecedented demand.

The city's population grew 5.1% year-over-year, adding hundreds of thousands of new residents requiring housing. Saudi Vision 2030's transformation plans have attracted over 200 global companies to establish regional headquarters in Riyadh, bringing high-earning expatriate professionals and their families who typically seek premium housing in specific neighborhoods.

Northern districts near the King Abdullah Financial District have become especially sought-after, offering proximity to new business hubs and premium amenities. The expatriate influx creates intense competition for quality apartments and villas in these areas. Supply constraints significantly amplify these demand pressures - despite government efforts to release more land for development, the construction pipeline hasn't kept pace with population growth.

The focus on luxury and mid-range developments means affordable housing remains scarce.

This perfect storm of demographic pressure, economic transformation, and supply limitations continues to drive rents upward across all market segments.

How fast have residential and commercial rents grown over the past 3 years?

The three-year growth trajectory reveals an accelerating trend with substantial cumulative increases.

It's something we develop in our Saudi Arabia property pack.

Property Type	2022-2023	2023-2024	2024-2025	3-Year Cumulative
Residential	8-12%	12-18%	10-23%	35-65%
Grade A Offices	12-15%	15-18%	18-21%	45-60%
Grade B Offices	15-18%	18-22%	22-26%	55-75%
Retail Spaces	8-12%	10-14%	8-14%	25-40%

Northern Riyadh has consistently outperformed, with some neighborhoods seeing rents nearly double over this period. The compound annual growth rate (CAGR) for residential properties averages 15-20%, while commercial properties have maintained an even higher 18-25% CAGR.

This sustained growth pattern indicates strong underlying demand fundamentals that continue to outpace supply additions.

How high could Riyadh rents realistically reach by end of 2026?

Based on current trends and market fundamentals, Riyadh rents could realistically increase another 15-25% by December 2026.

A 2-bedroom apartment currently renting for SAR 6,000-7,500 in northern districts could reach SAR 7,200-9,400 by end of 2026. Premium 3-bedroom apartments may climb from SAR 7,500-10,000 to SAR 8,600-12,000. Villas in gated communities could see rents rise from SAR 15,000-25,000 to SAR 17,250-30,000.

Grade A office spaces are projected to increase from SAR 1,800-2,500 per square meter to SAR 2,100-3,000. These projections assume no major policy interventions and continued economic growth. However, if the government implements proposed rent caps or successfully accelerates housing supply, actual increases could be limited to 8-12%.

Market conditions vary significantly by location and property type.

Northern and central districts will likely see the highest increases, while peripheral areas may experience more moderate growth.

What timeline are experts predicting for continued rent increases?

Market experts generally agree on a two-phase outlook for Riyadh's rental market through 2026 and beyond.

Phase 1, extending from now through Q1 2026, will see continued strong growth of 10-20% annually, driven by ongoing supply-demand imbalances and megaproject developments. The Riyadh Metro's full operation and The Avenues mall opening in Q1 2026 will likely create additional upward pressure in connected neighborhoods.

Phase 2, beginning Q2 2026, expects moderation as several factors converge. Government rent cap policies will likely take effect, while the first wave of new housing supply from lifted land restrictions enters the market. Completion of initial megaproject phases will absorb some construction workforce, and natural market maturation after years of rapid growth will temper increases.

Most analysts predict rent growth will slow to 5-10% annually by late 2026.

Premium locations near new infrastructure could still see 12-15% increases even as the broader market moderates.

What factors support continued rent increases in Riyadh?

Several powerful drivers suggest Riyadh's rental market will maintain upward momentum through 2026.

Riyadh continues attracting 200,000-300,000 new residents annually, creating constant housing demand that existing supply cannot meet. The regional headquarters program requires international companies to base operations in Riyadh, bringing high-earning expatriates who seek quality accommodation. Projects like NEOM and Red Sea developments employ thousands who need Riyadh accommodation during planning and construction phases.

Infrastructure improvements make previously peripheral areas more accessible and desirable. The Riyadh Metro and new road networks are transforming connectivity across the city. Non-oil sector growth of 5% annually creates sustainable job opportunities beyond government employment. Current rental yields of 6-9% attract investors who often hold properties rather than sell, limiting available inventory.

Despite government efforts, new housing supply won't match demand until at least 2027.

These fundamental drivers ensure continued upward pressure on rents across most market segments.

What could slow or reverse Riyadh's rent growth trend?

While the growth trajectory appears strong, several factors could moderate or even reverse rent increases.

Government interventions represent the most likely moderating force. Implementation of rent caps limiting annual increases to 5-10% could immediately slow growth. Aggressive land release programs might flood the market with development sites, while new regulations favoring tenants over landlords could reduce investor appetite. White Land Tax amendments forcing vacant plot development would accelerate supply.

Economic factors pose additional risks. An oil price collapse would affect government spending and employment, while a global recession could reduce foreign investment and expatriate arrivals. Local economic slowdown would limit job creation and wage growth, reducing rental demand. Market dynamics including oversupply in specific segments, particularly retail and secondary locations, could create downward pressure.

Competition from other Saudi cities offering better value might redirect demand.

The most likely scenario involves government intervention through rent caps and supply acceleration, limiting increases to single digits by late 2026.

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Which Riyadh neighborhoods are experiencing the steepest rent increases?

Northern Riyadh dominates the list of neighborhoods with the highest rent growth, driven by proximity to new business districts.

Hittin and Al-Malqa lead with 23% increases, benefiting from proximity to KAFD, premium schools, and new retail developments. Al-Nakheel follows with 22% growth due to modern infrastructure and family-friendly amenities. Al-Yasmin shows 20% increases as a growing commercial area with good connectivity, while Al-Safarat experiences 18% growth as the embassy district attracts expatriate residents.

Neighborhood	Rent Increase 2024-2025	Key Growth Drivers
Hittin	23%	Near KAFD, premium schools, new retail
Al-Malqa	23%	Diplomatic quarter proximity, luxury amenities
Al-Nakheel	22%	Modern infrastructure, family-friendly
Al-Yasmin	20%	Growing commercial area, good connectivity
Al-Safarat	18%	Embassy district, high security

Central business districts show strong but more moderate growth, with Olaya and Al-Malaz seeing 13% increases. Eastern and southern districts lag with 5-10% increases, though these areas offer better value for budget-conscious renters.

The pattern clearly shows premium areas pulling away from the broader market.

Which property types face the biggest impact from rising rents?

The rental surge affects property types differently, creating distinct market segments with varying growth rates.

Grade B offices lead with 26% annual increases due to severe shortages as companies seek affordable alternatives to fully-occupied Grade A spaces. Northern district apartments see 20-23% increases in premium locations, driven by expatriate demand and proximity to business centers. Family villas in gated communities experience 15-20% increases as international families seek secure, amenity-rich environments.

Studios and 1-bedrooms near Metro stations show 18-22% increases from young professional demand. Central district apartments face more moderate 10-15% increases due to greater supply options. Grade A offices, despite strong demand, see limited percentage increases due to already-high baseline rents. Peripheral residential units and older office buildings experience the smallest increases of 5-10%.

Retail spaces in secondary malls face potential oversupply risk.

This variation reflects fundamental differences in supply constraints and demand drivers across property segments.

Why do some property types see faster rent growth than others?

The variation in rent growth across property types reflects fundamental supply-demand dynamics and changing preferences.

Grade B offices lead growth because companies establishing regional headquarters need immediate space but find Grade A inventory fully occupied. These businesses accept older buildings temporarily while waiting for premium space, creating unexpected demand in the Grade B segment. Northern district apartments command premium growth due to their proximity to emerging business districts, international schools, and lifestyle amenities that attract both expatriate families and affluent Saudis.

Family-oriented properties outperform because Riyadh's demographic shift includes many expatriate families requiring 3+ bedroom units with outdoor space. Gated communities offering security, pools, and community facilities can charge significant premiums. Metro-adjacent properties see accelerated growth as young professionals increasingly choose apartments near stations, accepting higher rents for transportation convenience.

It's something we develop in our Saudi Arabia property pack.

Quality, location, and amenities increasingly determine pricing power in Riyadh's evolving market.

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What does this mean for property buyers in the short and medium term?

For potential property buyers, the current market presents both opportunities and challenges requiring careful timing decisions.

Short-term buyers (6-12 months) should act quickly if buying for personal use, as waiting will likely mean paying 8-15% more. Locking in current prices before potential rent cap implementation affects investment calculations becomes crucial. Focus on northern and central districts offers maximum appreciation potential, though expect intense competition with cash buyers and investors. Off-plan purchases may offer better prices but carry completion risk.

Medium-term considerations (1-3 years) suggest capital appreciation of 20-40% for well-located properties. Rental yields may compress from current 6-9% to 5-7% as prices rise faster than rents. Government interventions could limit both rent growth and price appreciation, while new supply entering the market by 2027 may moderate price growth.

Currency risk remains minimal with the SAR pegged to USD.

Investors must balance near-certain short-term appreciation against potential policy changes that could limit returns.

What are the long-term financial and strategic implications of investing now?

Investing in Riyadh property in mid-2025 positions investors at an inflection point with significant long-term implications.

Financial projections suggest substantial returns over extended periods. Capital appreciation could reach 40-70% cumulatively over 5 years and 80-150% over 10 years. Rental yields will likely moderate from current 6-9% to 5-7% over 5 years and 4-6% over 10 years as the market matures. Transaction costs remain 5-7% of property value but may increase with new taxes. Mortgage rates of 4-6% should remain stable, while currency risk stays minimal assuming USD peg continuation.

Strategic considerations include Vision 2030 alignment, with properties near megaproject sites offering superior long-term potential. Riyadh's young population ensures sustained housing demand through 2040. Economic diversification reduces oil dependence, creating more stable property market fundamentals. However, regional competition from Dubai and Doha may limit pricing power. Property taxes, foreign ownership rules, and tenant protections will likely evolve.

Long-term success requires diversification within Riyadh, focus on quality properties in prime locations, and careful monitoring of policy changes.

Patient investors who can navigate short-term volatility will likely see strong returns as Riyadh transforms into a global business hub.

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 stands at a critical juncture, with strong growth momentum meeting potential policy interventions.

While 2026 will likely see continued rent increases of 8-15%, government actions and new supply could moderate the exceptional growth rates of recent years. Investors and residents must carefully weigh location, property type, and timing to navigate this dynamic market successfully.