Saudi Arabia’s General Real Estate Authority announced that the law permitting non-Saudis to own property came into force on Thursday 22 January. The authority confirmed that Saudi Arabia’s “Real Estate Portal” will serve as the official digital platform for implementing the new ownership framework.
Under the law, non-Saudi individuals and companies are permitted to own property across most regions of the Kingdom. A separate regulatory framework applies to the holy cities of Makkah and Madinah, where ownership rights are restricted exclusively to Muslim individuals.
The enactment of Saudi Arabia’s law, permitting non-Saudis to own real estate, marks a defining moment for the Kingdom’s property sector. It represents not only a significant regulatory shift, but also a strategic and policy-driven repositioning of the Saudi real estate market on both a regional and global stage. Far from being a standalone legislative change, the move forms part of a wider economic recalibration, for which the aim is to steer and diversify the nation’s economic development. This step is expected to broaden income streams and enhance Saudi Arabia’s appeal to foreign direct investment. It also aligns directly with the objectives of Vision 2030.
A Change in Regulation With Market-Wide Influence
For many years, foreign ownership of property in Saudi Arabia was subject to strict limitations, confined to narrow frameworks or indirect arrangements such as ownership through companies or long-term usufruct agreements. The new system represents a clear departure from this approach, shifting the focus from restriction to regulation and from prohibition to structured oversight.
Rather than preventing foreign participation outright, the emphasis is now on managing ownership in a way that balances capital inflows with social and economic safeguards. Taken together, these measures are intended to create a more stable and predictable investment environment, an essential condition for attracting long-term foreign capital.
A Property Market Drawing Broader Attention
Opening property ownership to non-Saudis is likely to alter perceptions of the Saudi real estate market beyond the Kingdom. The change coincides with a period marked by solid economic fundamentals, extensive infrastructure investment, large-scale urban development, and steady demographic growth.
The entry of foreign investors, whether individuals or institutions, is likely to increase demand, particularly in major cities such as Riyadh, Jeddah, and Dammam, as well as in emerging tourism and economic destinations. This additional demand is expected to stimulate development activity, raise the quality of real estate products, and broaden the range of options available in the market.
Direct Impact on Major Development Projects
Among the primary beneficiaries of the new law are the large-scale projects that are developed as part of Vision 2030, including smart cities, tourism destinations, and mixed-use developments. From the outset, these projects were designed with an international audience in mind, setting their sights on attracting investors, residents and visitors beyond the domestic market.
In practical terms, foreign ownership strengthens the ability of such projects to attract long-term capital, supports deeper collaboration with international development partners, and contributes to more stable occupancy levels. Over time, this broadens their economic base and reduces reliance on purely local sales or leasing models, and reinforces the long-term sustainability of large-scale developments.
A Broader Range of Property and Rising Standards
As investors and buyers from diverse markets enter the Saudi real estate sector, the range and quality of products on offer are expected to evolve. Demand is likely to increase for high-end apartments, integrated residential communities, premium office space, and mixed-use developments that combine living, working, and leisure.
This shift will encourage local developers to raise design, construction, and management standards, to align closely with international benchmarks in sustainability, services, and user experience. Consequently, the law’s impact extends beyond the soaring demand to include a tangible improvement in the quality of supply.
What This Means for Financing and Banks
The growth in real estate activity resulting from the opening of ownership to non-Saudis will result in a prominent shift in the financing and banking sectors. Higher transaction volumes and the entry of new investors are expected to stimulate mortgage activity and lead to the development of new financial products tailored to the needs of non-Saudi buyers, whether residents or overseas investors.
Increased market activity is expected to feed through into associated services, including valuation, asset and property management, and legal advisory,contributing to a more joined-up real estate sector and wider professional employment opportunities.
Keeping the Market on an Even Keel
While the benefits are considerable, opening property ownership to non-Saudis is not without its challenges, it introduces risks that require careful oversight.
One of the most notable risks is a potential rise in prices in prime areas due to increased demand, particularly in the short term. This highlights the importance of regulatory oversight to prevent price inflation, avoid speculative bubbles, and preserve homeownership opportunities for citizens.
The success of the initiative will depend heavily on the clarity of implementing the regulations, the ease of procedures, and the transparency of real estate data. Any administrative complexity or regulatory uncertainty could dilute the intended benefits and weigh on investor confidence.
A Measured Step Within a Broader Economic Strategy
The new law of foreign ownership cannot be seen in isolation from the wider programme of economic reform. It sits alongside investment regulations, updates to commercial law, efforts to improve the business environment, liberalisation of tourism and policies aimed at attracting global talent. Given its close connection to the wider economy, the real estate sector is likely to serve as one of the clearest gauges of how effectively these reforms translate into practice. If managed with care, the market has scope to develop beyond its traditional domestic focus, evolving into one with greater international relevance and reach.
The introduction of the foreign ownership law marks the opening of a new phase for Saudi Arabia’s property market, one that is characterised by regulated openness, growing competitiveness and an emphasis on long-term sustainability.
As Vision 2030 continues to unfold, the Kingdom’s real estate sector appears set for a more qualitative transformation, with the potential to secure a stronger position among the region’s, and increasingly the world’s, most compelling property markets.
-png-1-3.png)
