Saudi Arabia freezes Riyadh rents for 5 years as property costs soar (It never works but here we are)

>Saudi Crown Prince Mohammed bin Salman has ordered a five-year freeze on rent prices in Riyadh after pledging to tackle soaring property costs in the capital.

>Under the new rules, which came into effect on Thursday, rent for vacant space will be fixed at its most recent price, according to the official Saudi Press Agency.

>The prince told the consultative Shura Council this month that the recent rapid increases were “unacceptable”. He vowed to deal with them though a set of policies that would “rebalance the sector, reduce costs, encourage real estate development and provide diverse housing options for citizens and investors”.

>Real estate prices have soared in the capital as a result of the prince’s ambitious economic diversification programme, including plans to make Riyadh one of the one of the world’s top 10 city economies. The boom has complicated the crown prince’s goal of a 70 per cent home ownership rate by 2030.

>“Rents have risen by 30-40 per cent over the past two to three years,” said Faisal Durrani, head of Middle East and north Africa research at Knight Frank. The growth was driven by “some 250,000 Saudi nationals migrating to the capital over the last five years, combined with the rising tide of expats moving to the city”.

>“The more exclusive northern districts have experienced even higher increases of around 50-60 per cent during the same period,” he said.

>The government has sought to address the supply shortage by tightening rules on idle plots, known as “white lands”. Rules announced last month will quadruple the annual tax rate on undeveloped land larger than 5,000 square metres in some areas of Riyadh.

>Authorities are currently developing several large projects in the capital, including a new national park and an entertainment zone with a Formula 1 track. They plan to expand Riyadh’s airport ahead of major international events, including Expo 2030 and the 2034 Fifa World Cup.

“Allah is the One Who fixes prices, Who withholds, gives lavishly, and provides. I do not want to meet Allah with anyone having a claim against me regarding blood or wealth.”
(Sunan Abū Dāwūd, al-Tirmidhī)

I’m reading a book on the history of the Nazi Economy and I found it funny that the Weimar government implemented rent controls following WW1, which led to a shortage of housing.

Rent control was shown clear as day not to work over a century ago and yet most modern governments still want to implement it.