Summary
- Saudi Arabia will allow non-citizens to buy property in select areas starting January 2026.
- The law targets Riyadh and Jeddah, with restrictions for Mecca and Medina.
- The policy marks a key Vision 2030 milestone to boost FDI and diversify the economy.
Vision Meets Land: Foreign Ownership Enters Saudi Soil
For decades, foreign residents and investors in Saudi Arabia have eyed the Kingdom’s vast urban transformation projects with cautious admiration—and frustrating distance. That is set to change. Starting January 2026, Saudi Arabia will formally allow non-Saudi nationals to own real estate in designated zones, including key metros like Riyadh and Jeddah. The Saudi Cabinet’s approval of this sweeping legal change reflects more than a regulatory update—it signals a radical shift in the Kingdom’s investment ethos under Crown Prince Mohammed bin Salman’s Vision 2030.
The law, introduced by Minister Majed Al-Hogail, is billed as a cornerstone in Saudi Arabia’s real estate reform program. It aims to expand supply, boost competition, and—critically—attract foreign capital into a market still largely dominated by domestic and Gulf Cooperation Council (GCC) stakeholders. Yet the move also comes with calculated caution: Mecca and Medina, the spiritual epicenters of Islam, will remain tightly regulated, preserving religious and political sensitivities even amid economic liberalization.
The decision positions Saudi Arabia in league with global property investment hubs, while also addressing internal housing demand and pushing forward a more diversified national portfolio. What does this mean for investors, locals, and the Kingdom’s long-term growth narrative? Let’s break it down.
The recent decision by the Saudi council of ministers to permit foreign ownership of real estate marks a defining milestone in the Kingdom’s economic transformation journey. This strategic reform is set to unlock substantial foreign direct investment, invigorate capital inflows… pic.twitter.com/SVhXnVXTgJ
— Ahmed J Masehali ❤️🇸🇦❤️ (@abufarisrrt) July 9, 2025
Riyadh and Jeddah Open Up, Mecca and Medina Remain Guarded
- Foreigners can purchase real estate in specified zones starting January 2026.
- Riyadh and Jeddah are prioritized in phase one; holy cities face additional restrictions.
- New zones to be defined by the Real Estate General Authority.
- Executive regulations will be publicly consulted via “Istitlaa” in early 2026.
This historic legal opening begins with Saudi Arabia’s most globally integrated cities—Riyadh and Jeddah. As financial, commercial, and entertainment hubs, these cities are already home to ambitious real estate ventures like NEOM, Diriyah Gate, and the Jeddah Central Project. The decision to allow foreign ownership here could unlock billions in foreign direct investment (FDI), particularly from institutional investors in Asia, Europe, and the Gulf.
However, ownership in Mecca and Medina—two cities with unparalleled religious significance—will be tightly regulated. According to Minister Al-Hogail, any property transactions in these areas will undergo extra layers of oversight, with religious, demographic, and national security considerations playing a role.
To ensure transparency, the Real Estate General Authority will publish a draft of the implementation guidelines within 180 days. Through the “Istitlaa” platform, stakeholders can participate in shaping how eligibility, compliance, and due diligence will be handled.
What’s Driving This Change? Vision 2030 and FDI Targets
- The reform aligns with Saudi Arabia’s Vision 2030 economic diversification goals.
- Targets increased FDI in non-oil sectors, especially real estate.
- Builds on Premium Residency Law and existing GCC property frameworks.
- Also addresses domestic housing demand and demographic shifts.
Saudi Arabia’s push to enable foreign property ownership is not occurring in isolation. It is the latest policy pillar in the Kingdom’s Vision 2030, an ambitious national transformation agenda that seeks to reduce dependence on oil revenues. From opening tourism to launching mega-projects like The Line and Qiddiya, the leadership has signaled that “business as usual” will not get the country where it needs to go.
Allowing non-Saudis to purchase property serves multiple purposes: it injects fresh capital into underutilized land markets, encourages the development of higher-density urban housing, and taps into the growing global appetite for Middle Eastern real estate. Moreover, it follows the momentum set by the Premium Residency Law, which lets high-skilled expatriates live and work in Saudi Arabia without sponsorship—offering them stability and now, potential roots through real estate.
With an increasingly young population and urbanization rates on the rise, the new law also responds to mounting domestic housing pressure. Enabling foreign investment in a regulated way may help expand supply and stimulate innovation without burdening the public housing system.
Investor Appeal vs. Local Anxiety: Who Really Benefits?
- Critics worry the law could inflate property prices in core urban zones.
- Safeguards are promised, but details on affordability protections remain vague.
- Some fear foreign speculation could sideline middle-class Saudis.
- Others argue the benefits—jobs, infrastructure, GDP growth—far outweigh the risks.
While the international investor community has largely welcomed the move, domestic reactions are mixed. Some urban planners and citizen advocates warn that foreign speculation could drive up prices in key neighborhoods, especially in Riyadh and Jeddah, further pushing housing out of reach for young Saudi families.
There are also concerns about gentrification, loss of cultural cohesion, and the possibility of short-term capital inflows being prioritized over long-term community stability. Minister Al-Hogail has stressed that “procedural safeguards” will be embedded to protect national interests—but these measures remain unspecified in the initial announcements.
At the same time, proponents argue that fears of runaway speculation are overstated. With executive regulations still to be published, the government has the opportunity to balance investor incentives with socio-economic protections—through zoning controls, resale limitations, and pricing guidelines.
If implemented prudently, the policy could usher in more than capital—it could bring architectural innovation, sustainable construction practices, and a reimagined urban experience for all residents.
Beyond Ownership: A New Global Identity for Saudi Real Estate
Saudi Arabia’s decision to allow foreign nationals to buy real estate is about more than land—it’s about legitimacy. By inviting international investors into its urban core, the Kingdom is signaling confidence, openness, and a willingness to be held to global standards. The real estate law complements a broader narrative shift: from closed kingdom to competitive, cosmopolitan hub.
However, the true test lies ahead. Transparency, clarity of regulation, and ease of transaction will determine whether Saudi Arabia truly becomes a magnet for global capital—or merely a footnote in the world’s evolving property map. For now, Riyadh and Jeddah are open for business. The world is watching what comes next.
