LONG READ
The Saudi government’s surprise decision to freeze rent increases in Riyadh for five years has triggered debate in the UAE, where more than 456,000 units were rented in Dubai in 2023, generating AED27 billion. The question on many residents’ minds is whether Dubai could see a similar measure.
On September 25, Saudi Arabia enacted sweeping regulations prohibiting any rent increases in Riyadh until 2030. Officials say the freeze is meant to stabilise rents in a market under extreme pressure. Riyadh’s rents have surged by 10 to 23 per cent annually since 2023, with experts warning of another 15 to 25 per cent rise by the end of 2026. Housing shortages have been described as reaching a ‘boiling point,’ even as mega-projects such as the Riyadh Metro, Expo 2030, and FIFA World Cup 2034 are set to further boost demand.
The city’s residential stock stood at 1.92 million units in mid-2025, yet apartment prices have risen nearly 82 per cent since 2019 and villa prices by 50 per cent. Residential sales reached SAR65.7 billion ($17.5 billion) in the first half of 2025, up 63 per cent year-on-year. Faced with these sharp increases, the government chose a total freeze to restore balance.
Dubai’s rent regulation history
Dubai, by contrast, has a long tradition of rent caps and rent indices, but has avoided blanket freezes. In the 1980s, Dubai introduced temporary freezes to manage inflation, but since the creation of the Real Estate Regulatory Agency (RERA) in 2007, the city has relied on a structured Rental Index system. This index allows for incremental increases — ranging from five to 20 per cent — depending on how far below market average a contract sits.
Unlike Saudi Arabia’s sudden, absolute freeze, Dubai’s model is designed to offer flexibility. Landlords must give 90 days’ notice before increases, and tenants can challenge rents through RERA’s mechanisms. Over the years, Dubai has periodically capped increases, such as a 15 per cent cap in 2005 and a five per cent cap in 2008, but these were temporary. Since 2013, the index has provided a tiered, data-driven framework instead of heavy-handed freezes.
Why Dubai, Abu Dhabi won’t adopt a freeze
Analysts say a complete freeze is unlikely in Dubai for two reasons. First, the emirate’s real estate strategy relies on market-led growth, tempered by transparent regulation rather than government-imposed bans. Second, Dubai’s rental market is larger and more globally integrated, with over 900,000 registered rental contracts in 2024, compared with Riyadh’s more constrained supply.
According to Ben Crompton, Managing Partner, Crompton Partners the two markets – UAE and Saudi – are very different. “I don’t see a way in which this decision would directly impact Abu Dhabi’s rental market. For people renting in Abu Dhabi, moving to Riyadh to take advantage of lower rents isn’t really an option,” he said.
He, however, said that Investors could well turn away from investing in Riyadh, or Saudi Arabia more generally, and rather invest in Abu Dhabi. “The unintended consequences of this rent freeze might be that investors worry about the value of building homes in KSA. There is talk it could be extended to other cities, and if investors can get better returns in the UAE, they may well look this way. Investors also hate unpredictability, and a seemingly out-of-the-blue move like this may spook them,” he added.
Commenting on if Abu Dhabi’s rental policies face greater scrutiny from tenants and regulators in light of Saudi Arabia’s interventionist approach, Ben said, “Tenants – and even the government here – might look at this and think it is a good idea, but they should think carefully.”
“It seems on the face that this will be good for tenants but as noted above, it could actually push rents further up if people stop building. Secondly, it could mean reduced or zero re-investment or maintenance on properties, as investment will yield no better return in terms of rent, and also tenants could become locked into the property they are in, unable to move as rents for newer or vacant properties skyrocket.”
Dubai’s Smart Rental Index
Dubai’s Smart Rental Index, launched in 2025, evaluates buildings on technical quality, maintenance, and services, ensuring rent adjustments are tied to measurable standards. This approach supports both investor confidence and tenant protection. A freeze would risk distorting incentives, discouraging landlords from maintaining properties, and dampening foreign investment – the very opposite of Dubai’s positioning as a global hub.
History shows that rent freezes often backfire. From New York in 1943 to Bombay in 1947 and Cairo in 1920, rigid freezes protected tenants in the short term but discouraged new supply and investment, creating distortions in housing markets. Even in Europe, where Germany and Sweden impose strong controls, policymakers grapple with balancing tenant security against investor incentives.
Dubai has chosen a middle path avoiding rent shocks while maintaining investor appeal. RERA’s system has given tenants predictability without alienating landlords, a balance that Saudi Arabia’s policy now tests in Riyadh.
The bottom line
Saudi Arabia’s five-year freeze is a response to extraordinary housing pressures in its capital. Dubai, with its structured rent regulation system and reliance on the Rental Index, is unlikely to follow. Instead, the UAE will continue refining its cap-and-index approach which allows gradual, transparent adjustments. For tenants, that means no sudden relief in the form of a freeze. For investors, it means continued confidence that Dubai will protect yields while keeping affordability in check.
