Supply-Demand Dynamics and Policy Interventions in Riyadh’s Real Estate Market: An Empirical and Policy-Oriented Assessment

Abstract

Riyadh, the capital of the Kingdom of Saudi Arabia, has experienced significant urbanization and economic transformation in recent decades. Nonetheless, the real estate market continues to face challenges due to persistent supply-demand discrepancies, particularly within the mid-to-lower-priced housing segments. This study investigates the fundamental drivers of these imbalances and evaluates the effectiveness of key policy interventions, which include the Sakani Program, the Real Estate Development Fund (REDF), and the White Land Tax (WLT). A mixed-methods approach was implemented, incorporating a cross-sectional survey of 280 participants alongside qualitative insights from real estate professionals. The findings reveal that elevated land prices, speculative activities, gaps in policy enforcement, and demographic changes exacerbate affordability issues. Despite initiatives such as Sakani and REDF aiming to facilitate homeownership, factors including peripheral development and insufficient infrastructure hinder their efficacy. Moreover, the incomplete enforcement of the WLT permits idle landholding to persist, thereby constraining supply in strategically important areas. This study contextualizes Riyadh’s real estate challenges within a broader international framework by comparing housing policies in Dubai, Singapore, Shanghai, Doha, and Manama. Based on these insights, the study proposes several policy recommendations: the progressive enforcement of the WLT, enhanced financial assistance for low-income groups, and increased incentives for mixed-use, transit-oriented development. The findings contribute to ongoing urban policy discussions and provide evidence-based guidance for sustainable and inclusive real estate planning in Riyadh.