Property Ownership for Foreigners in Saudi Arabia: Investors React

Saudi Arabia is opening its real estate market to foreign investors as part of a broader economic diversification strategy. The new law, approved by the Saudi Cabinet, allows non-Saudis to own property in key cities like Riyadh and Jeddah, with special regulations for Mecca and Medina. This move aims to attract foreign investment, boost housing supply, and reduce the country's reliance on oil.

The announcement has already sparked positive reactions in the market. Shares of major real estate firms, such as Retal Urban Development Co. and Saudi Real Estate Co., saw significant gains, pushing the Tadawul Real Estate Index to its highest point since May. Experts anticipate broad benefits across various sectors, including real estate development, cement production, and banking.

The Real Estate General Authority will oversee the implementation of the new law, defining eligible areas for foreign ownership and establishing the rules. These rules, expected to be released for public feedback within 180 days, will cover eligibility criteria, application procedures, designated geographic zones, and ownership conditions in sensitive areas.

The law is scheduled to take effect in January 2026, with detailed executive regulations expected within six months. The government emphasizes that the policy is designed to protect Saudi citizens' interests while encouraging global investor participation. This reform builds upon previous steps to open the property market, including allowing foreign investors to own shares in real estate firms operating in the holy cities.