In a groundbreaking move aligned with its ambitious Vision 2030 plan, Saudi Arabia has announced it will allow foreign ownership of real estate starting January 2026. This reform represents a seismic shift in the Kingdom's approach to attracting foreign investment and marks a pivotal step toward transforming Saudi Arabia into a globally competitive property market.

What’s Changing?

Under the new law approved by the Saudi Cabinet, non-Saudis will be permitted to own property in designated areas across the Kingdom. The focus areas include:

• Riyadh – the economic and administrative capital
• Jeddah – the commercial heart on the Red Sea coast
• Other zones – to be announced soon by the Real Estate General Authority

Special restrictions will apply to Mecca and Medina due to their religious significance, requiring additional approvals and oversight.

Why This Matters

This policy change mirrors the successful real estate liberalization seen in other Gulf nations such as the UAE and Qatar. In Dubai, for instance, the decision to allow expat property ownership in 2002 ignited a property boom, turning the city into one of the world’s top investment hubs. Today, Dubai’s ultra-luxury property market competes with New York and London in terms of sales volume above $10 million.

Saudi Arabia is now poised to follow suit.

The goals are twofold:

• Retain domestic spending: Encouraging Saudis to invest in domestic projects instead of overseas real estate.
• Attract foreign wealth: Tapping into global demand for vacation homes and luxury residences, especially from high-net-worth individuals in the Muslim world.

Mega Projects Fueling Demand

Saudi Arabia’s property market is already riding a construction wave, bolstered by mega-developments such as:

• The Mukaab in Riyadh – A cube-shaped structure under construction set to become the world's largest built structure, anchoring the $800 billion New Murabba downtown redevelopment.
• NEOM – The Kingdom’s futuristic smart city near the Red Sea.
• Red Sea Resorts – Including luxury destinations like the Ritz-Carlton Reserve now open to guests.

These projects are being complemented by tourism-friendly reforms and massive infrastructure investment, turning the Kingdom into a magnet for regional and global interest.

What Foreign Investors Need to Know

• Effective Date: The law comes into force in January 2026.
• Official Guidelines: Within 180 days of publication in the official gazette, the government will release detailed regulations through the Istitaa platform for public consultation.
• Regulatory Oversight: The Real Estate General Authority will determine where and how foreign ownership is permitted.
• Economic Safeguards: Rules are being structured to protect Saudi citizens while opening doors for global participation.

Who Benefits?

This reform is expected to boost several key sectors:

• Real estate developers and construction companies
• Banking and mortgage providers
• Cement, infrastructure, and utilities sectors
• Tourism and hospitality

Notably, shares of Saudi real estate firms surged after the law’s announcement, reflecting market optimism.

Global Demand Already Rising

According to a Frank Knight report in 2024, demand among wealthy Muslims is surging — with 79% indicating interest in purchasing property in Mecca or Medina, with budgets exceeding $4 million. Additionally, Saudi high-net-worth individuals currently rank among the top foreign buyers in Dubai, hinting at latent domestic demand ready to be unlocked.

What Should You Do Now?

Foreign investors and expats eyeing the Saudi real estate market should:

1. Monitor the Istitaa platform for regulatory updates and designated areas.
2. Connect with trusted developers and real estate advisors now to position themselves early.
3. Track high-growth zones like Riyadh, Jeddah, and NEOM for potential investment opportunities.

Looking to Invest in Saudi Arabia? Connect with KEY Aqar Today

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With deep insight into emerging zones, developer partnerships, and premium real estate services tailored to expats and international buyers, KEY Aqar helps you navigate the opportunity before it becomes mainstream.

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