Saudi Arabia Enacts New Real Estate Law to Attract Foreign Investment
Saudi Arabia has passed a significant real estate law that will allow foreigners to purchase property in specific areas of Riyadh and Jeddah. This move aims to diversify the economy away from oil and replicate the real estate success seen in Dubai.
Real EstateForeign InvestmentSaudi ArabiaPropertyEconomic DiversificationReal EstateJul 10, 2025
The new regulations will include strict controls to protect the interests of Saudi citizens and national priorities. The authority will release detailed guidelines that will outline eligible property zones, foreign ownership procedures, investor qualifications, and compliance mechanisms. These measures aim to ensure a balanced and sustainable approach to the real estate market.
According to Majed bin Abdullah Al-Hogail, Minister of Municipal Rural Affairs and Housing, the reform will significantly boost the real estate supply by attracting investors and real estate development companies to the Saudi market. This is expected to trigger a real estate boom, benefiting not only the economy but also companies that can invest in apartments or villas to accommodate their staff. Prominent expatriates will also have the opportunity to buy homes in the kingdom.
The Kingdom hopes to replicate the real estate success seen in Dubai, where property levels have reached those of major global cities like New York and London. The United Arab Emirates (UAE) already allows 100% foreign ownership of real estate brokerages, investment consultancies, and development firms, which has contributed to its real estate boom.
The announcement has already had a positive impact on the Saudi real estate market. Stock prices of real estate companies have rallied, following the trend seen in the previous year. In 2024, the real estate sector's contribution to the national economy nearly doubled, rising from 5.9% of GDP in 2023 to 12% in 2024. Major cities like Riyadh, Jeddah, and Dammam are experiencing a surge in demand for housing, driven by population growth and infrastructure development.
The new law is a significant step towards transforming Saudi Arabia into a more appealing destination for foreign investors and expatriates. By creating a more inclusive real estate market, the Kingdom aims to foster economic growth and diversification, ultimately reducing its reliance on oil and positioning itself as a leading global financial and business hub.
Frequently Asked Questions
When will the new real estate law take effect?
The new real estate law in Saudi Arabia will take effect in January 2026.
Which cities in Saudi Arabia will allow foreign property ownership?
Foreigners will be allowed to purchase property in designated areas of Riyadh and Jeddah.
What are the main goals of this new real estate law?
The main goals of the new real estate law are to attract foreign investment, diversify the economy away from oil, and replicate the real estate boom seen in Dubai.
How will this law benefit expatriates in Saudi Arabia?
This law will enable expatriates to buy homes in Saudi Arabia, providing them with more options for accommodation and potentially improving their quality of life.
What impact has this announcement had on the Saudi real estate market?
The announcement has caused Saudi real estate stocks to rally, and it is expected to boost the real estate supply and attract more investors to the market.
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