Saudi Arabia’s Crown Prince Mohammed bin Salman followed through on his pledge to control rents, ordering on Thursday a five-year freeze on residential and commercial leases in Riyadh to curb soaring prices. The measure adds to other steps, such as higher taxes on vacant plots and buildings, aimed at forcing more supply into the market.
While renters in the city rejoiced, concerns have emerged that the freeze could depress real estate company valuations and scare off foreign investors. Home prices in Riyadh have spiked in recent years as job creation attracted a flood of expats and encouraged many Saudis to relocate from other parts of the country. The pace has slowed this year: the real estate price index rose 3.6% in the second quarter, compared with 10.7% in the first.