Saudi Arabia has officially opened its real estate market to foreign buyers, with the new Law on Non-Saudis’ Ownership of Real Estate taking effect on January 21, 2026. This represents one of the most significant structural reforms in the Kingdom’s property sector in decades and aligns closely with the government’s Vision 2030 economic diversification agenda.
The legislation, which was approved by royal decree in 2025 and published in the official gazette last July, followed a six-month transition period. For months before formal approval, developers, investors, and advisers had been closely monitoring its progress, anticipating that Saudi Arabia would eventually follow other Gulf markets in relaxing foreign ownership restrictions.
Under the new framework, non-Saudis can purchase residential, commercial, industrial, and agricultural property within designated areas yet to be announced by authorities. Foreign residents of Saudi Arabia receive additional privileges—they are permitted to own one personal residence outside these designated zones, provided it is not located in the holy cities of Mecca or Medina. Non-residents, however, may only purchase property within the designated zones once these are officially announced.
Strict restrictions remain in place for Mecca and Medina, where ownership continues to be limited to Muslims and subject to specific conditions. Foreign companies are generally prohibited from owning property in these two holy cities, with exceptions only for Saudi-incorporated companies with foreign shareholders that require real estate for operational purposes or employee housing, and only where permitted under the law.
The reform comes at a time of strong momentum in Saudi Arabia’s property market. According to CBRE Middle East, the Kingdom’s non-oil economy accounted for 56 percent of GDP in 2025, driving demand across residential, office, retail, hospitality, and industrial segments. The country’s development pipeline ranks among the world’s largest, with approximately $440 billion in committed projects and a longer-term pipeline valued at $1.55 trillion.
Major giga-projects such as NEOM, Diriyah, and the Red Sea developments dominate future supply, while immediate activity has concentrated in Riyadh, partly driven by the Regional Headquarters program. The capital’s office market has shown particularly robust performance, with Grade A rents rising 15 percent year-on-year in 2025 and occupancy rates approaching 98 percent. Residential transactions also demonstrated strong growth, increasing nearly 18 percent quarter-on-quarter in the third quarter, reaching SAR 7.7 billion in value.
The new legislation is expected to attract significant foreign capital while maintaining regulatory safeguards to prevent market bubbles and ensure housing remains accessible to Saudi citizens. By institutionalizing foreign participation in its property market, Saudi Arabia is positioning itself as a major destination for international real estate investment and demonstrating its commitment to becoming a key player in the global investment landscape.
Source: Arabian Business – https://www.arabianbusiness.com/industries/real-estate/saudi-arabia-officially-opens-property-market-to-foreigners-as-long-awaited-law-takes-effect
