Saudi Real Estate Stocks Surge as Cabinet Approves Foreign Ownership Law

JEDDAH / RIYADH - 9 July 2025 — Saudi Arabia's real estate sector witnessed a significant boost as the Saudi Cabinet approved a transformative law permitting foreign ownership of real estate in the Kingdom. The decision sparked a sharp rally on the Saudi Exchange, particularly among real estate development firms, reflecting renewed investor confidence in the sector.

Market Reacts with Strong Gains

Real estate stocks surged to their highest levels in nearly two months. Companies such as Umm Al Qura for Development and Construction, Saudi Real Estate Company (Al Akaria), and Retal Urban Development recorded gains between 7% and 9%. Other major developers, including Jabal Omar Development, Dar Alarkan, and Emaar The Economic City, also posted notable increases in stock value.

The Real Estate Management and Development Company index showed its strongest performance in two weeks, indicating broad investor optimism and strong market sentiment following the Cabinet's announcement.

New Ownership Law to Take Effect in 2026

The newly endorsed law, set to come into force in January 2026, will regulate foreign ownership of real estate within Saudi Arabia. Under the law, non-Saudi individuals and entities will be allowed to purchase real estate or related rights within designated zones, which will be determined by the Real Estate General Authority.

This legal reform aims to modernize the property sector, expand foreign participation, and enhance market competitiveness while ensuring regulation and transparency.

Aligning with Vision 2030

The move supports the broader objectives of Saudi Vision 2030, which aims to diversify the economy, attract foreign direct investment, and develop new economic sectors beyond oil. Since the launch of Vision 2030, nearly SAR 900 billion has been invested in real estate projects across the Kingdom, underscoring the government's focus on urban transformation and infrastructure expansion.

Opening the market to international investors aligns with this vision and positions Saudi Arabia as a competitive global real estate hub.

Opportunities and Implications

The new law presents a range of opportunities for developers, investors, and the broader economy. Developers may benefit from increased demand, enabling them to expand their project portfolios and access new funding streams. Investors, both regional and international, will gain access to previously restricted markets, fueling growth and diversity in property ownership.

Additionally, the anticipated rise in property transactions and capital inflow is likely to stimulate broader economic activity and urban development in key cities such as Riyadh, Jeddah, and NEOM.

A Strategic Shift for the Kingdom

This decision marks one of the most significant liberalizations of Saudi Arabia’s real estate sector in recent history. By providing a legal pathway for foreign property ownership, the Kingdom is not only enhancing market liquidity but also building a more inclusive and globally integrated investment environment.

With implementation set for early 2026, stakeholders will now turn their focus to the forthcoming guidelines from the Real Estate General Authority, which will define the geographic zones open to foreign ownership and establish the operational framework for compliance and participation.