According to data provided by analysts from the international real estate agency Knight Frank, apartment rents in northern communities of Riyadh surged by 23% last year.

Analysts predict that the shortage of available rental properties in the local market may worsen in the coming period. Those relocating to Riyadh for employment or education, especially employees relocating with their companies, may bear the brunt of higher rental costs.

As the city with the largest population in Saudi Arabia, Riyadh's population grew by 5.1% year-on-year, reaching around 8 million people according to the 2022 Saudi population census. Additionally, the Saudi government implemented policies related to regional headquarters starting from January 2024. Companies not establishing regional headquarters in Saudi Arabia or relocating their regional headquarters to the country will not be eligible for government contracts in the future.

Currently, over 200 global companies have obtained permits to establish regional headquarters in Saudi Arabia, including well-known enterprises such as Amazon, Microsoft, Google, Airbus, Oracle, Pfizer, Bechtel, PwC, and Pepsi.

There is a significant gap in the total supply of the local real estate market, and for foreign nationals, finding housing that meets their needs and budget is becoming increasingly challenging. More people are concentrating around business centers and office buildings, causing rents in the surrounding areas to rise more quickly.

For instance, in the northern part of the city near the King Abdullah Financial District (KAFD), rental prices in the Marka community increased by 23% last year. Rental prices in central areas like Olaya and Al-Malaz also rose by 13%, while in the western Dahlat Ar Rabban district, rents increased by 8% due to shorter commuting times.

The average local rent in Riyadh is estimated to be 24,800 Riyals per year (approximately 47,000 RMB), with monthly rents for high-end apartments reaching over 7,000 Riyals. For some middle-income families and single individuals in Riyadh, rent has become a heavy burden.

Due to the insufficient inventory of rental housing to meet the needs of foreign nationals, significant investments are pouring into Riyadh to construct more apartment projects for this demographic. Although these real estate projects will take time to translate into additional supply in the market, they indicate the potential for sustained growth in Riyadh's real estate market over the long term.

However, besides the high rental prices, foreign nationals also face the issue of limited housing choices, as some communities are more geared towards family living and less welcoming to single individuals. Additionally, the limited number of affordable housing units constructed by the Saudi government cannot meet the demand of single individuals. This poses a significant challenge for some foreign nationals and may impact their life and work in Riyadh.