Saudi Arabia Opens Real Estate Market to Foreigners in Landmark Reform

Jeddah / Riyadh, July 9, 2025 – Saudi Arabia has taken a major step toward opening its economy to the world by approving a new law that will allow non-citizens to own property in the Kingdom for the first time under a broad legal framework. The law, approved by the Saudi Cabinet under the leadership of Crown Prince and Prime Minister Mohammed bin Salman, is expected to come into effect in January 2026 and marks a significant shift in the country's real estate landscape.

Where and How Foreigners Can Invest

Under this legislation, foreigners will be able to purchase property in designated areas within major urban centers such as Riyadh and Jeddah. While the law will also extend to the holy cities of Makkah and Madinah, stricter conditions will apply due to their religious significance. Oversight of the new system will be managed by the Real Estate General Authority, which has been tasked with defining the geographic zones where foreign ownership will be permitted and crafting detailed regulations. These regulations will be made available for public consultation within six months of the law’s publication in the official gazette.

Balancing Growth with Market Stability

The law aims to strike a balance between attracting foreign capital and protecting the interests of Saudi citizens. It includes measures designed to control the ownership process and prevent speculative activity that could disrupt the local housing market. This reform is part of the Kingdom’s broader Vision 2030 strategy, which seeks to diversify the economy, attract international investment, and reduce reliance on oil revenue.

The real estate sector plays a key role in Vision 2030, having already shown impressive growth over the past year. In 2024, the sector contributed approximately 12 percent to the national GDP, up from 5.9 percent the previous year, buoyed by a surge in licenses and construction activity.

Broader Inclusion of Foreign Investors

In recent years, Saudi Arabia has taken gradual steps to open its property market to select groups of foreigners, including residents under the Premium Residency program and citizens of Gulf Cooperation Council states. The new law represents the most comprehensive and inclusive policy to date, potentially unlocking large-scale international interest.

Investment in real estate linked to religious tourism is also expected to rise. In particular, foreign investment through listed companies in Mecca and Medina is now formalized and capped at 49 percent, with the goal of increasing liquidity and developing infrastructure that supports the annual influx of pilgrims for Hajj and Umrah.

What Comes Next for Investors

The government is going to publish a zoning map showing areas open to foreign ownership. A public consultation period will follow, allowing stakeholders to weigh in on the proposed implementation guidelines. Investors and developers eyeing the Saudi market are advised to monitor these developments closely, as the rollout of executive regulations will set the tone for the country’s real estate future.