In a landmark shift that reflects Saudi Arabia’s Vision 2030 and enhances the Kingdom’s appeal to global investors, the Saudi government has officially announced that foreign nationals will now be permitted to own property in several key cities including Riyadh, Jeddah, and Dammam. Ownership in the holy cities of Mecca and Medina will remain subject to specific regulatory conditions. This decision marks a significant turning point for the Saudi real estate sector and is expected to catalyze major inflows of foreign capital.
From Restrictive Policies to Strategic Openness
Historically, property ownership in Saudi Arabia has been restricted to citizens and a limited subset of residents under strict conditions. The move to allow foreigners full ownership rights is a profound policy transformation, signaling confidence in the stability and long-term growth potential of the Kingdom’s real estate market.
Saudi Arabia has undergone a major legislative revision regarding non-Saudis owning property. Previously, foreign ownership was limited to residential properties and was heavily regulated, often requiring lengthy approval processes. The updated framework grants foreigners the right to own commercial and industrial real estate as well broadening the horizon for global capital and international developers to enter the Saudi market.
One of the most noteworthy aspects of the new policy is the potential inclusion of non-Saudi Muslims in the property ownership framework for Mecca and Medina. While details are still emerging, this would represent an unprecedented development, likely to boost religious tourism and investment in hospitality sectors in the two holy cities.
Under the old law, foreign ownership was conditional upon legal residency and a valid work permit, and often subject to a “reciprocity principle,” whereby foreigners could own property only if their home country granted similar rights to Saudis. These requirements have now been relaxed significantly, signaling a more investor-friendly approach.
A Real Estate Market on the Brink of Transformation
The announcement has already had a visible impact on the financial markets. Shares of listed real estate development companies on the Saudi stock exchange recorded gains exceeding 6%, reflecting a wave of optimism surrounding the sector’s future.
According to Q1 2025 data, the Saudi real estate market recorded transactions worth approximately SAR 60 billion, with residential sales accounting for 65% of the total a strong indication of robust local demand even before the implementation of the new law.
Riyadh and Jeddah have emerged as the most attractive destinations for real estate investment, thanks to ongoing megaprojects, expanding infrastructure, and a steady stream of economic and cultural events. In the capital city, residential property sales constituted 61% of all real estate transactions in Q1 2025, marking a 3% year-on-year increase. This growth has been fueled by urban expansion, population growth, and significant improvements in infrastructure and quality of life.
Meanwhile, Jeddah, with its strategic location on the Red Sea, continues to attract investments in mixed-use developments, luxury housing complexes, and modern family communities, reinforcing its position as one of Saudi Arabia’s top coastal real estate markets.
Forecasts suggest that the number of residential units in Riyadh will increase from 1.4 million at the end of 2024 to around 1.7 million by 2030 creating a broad spectrum of opportunities for both domestic and international investors. The policy is also expected to energize transaction volumes in targeted areas, increase demand for residential, commercial, and hospitality projects, and enhance market transparency through regulations that protect buyers and developers alike. Additionally, it is likely to generate new employment in construction, property management, and ancillary services.
Lessons from Global Precedents
With Saudi Arabia opening up its real estate sector to foreigners, the country stands at the threshold of a transformative era that could fundamentally reshape its property market and boost its global investment appeal. To better understand the potential impact, it is useful to examine international case studies where similar policies have yielded substantial results.
UAE: A Regional Pioneer in Freehold Ownership
The United Arab Emirates, particularly Dubai, is a leading example of successful liberalization in the real estate sector. Since the early 2000s, Dubai has allowed foreign freehold ownership in designated zones, linking property investment to long-term residency and, later, to golden visa programs. As a result, Dubai recorded over AED 160 billion in real estate transactions in 2023 alone, cementing its status as a global hub for luxury real estate.
Turkey: Real Estate as a Pathway to Citizenship
In 2012, Turkey allowed foreigners to own property, with the added incentive of acquiring Turkish citizenship for investments starting from $400,000. This policy attracted significant interest from Arab and Asian investors, with over 67,000 units sold to foreigners in 2022, especially in Istanbul and Antalya.
Portugal: Golden Visa and Urban Revitalization
Portugal’s “Golden Visa” program, launched in 2012, granted residency in exchange for real estate investment. It brought in over €6 billion in foreign capital, contributing to urban regeneration and stimulating the real estate sector in Lisbon, Porto, and other cities.
Malaysia: Long-Term Residency via Real Estate
Malaysia’s “Malaysia My Second Home” program linked property ownership to long-term residency. It attracted thousands of investors from China and the Middle East, promoting Malaysia as a safe and attractive destination for retirement and real estate investment.
Egypt: Partial Success with Expanding Opportunities
Egypt has implemented gradual reforms to attract foreign property investment, linking residency rights to real estate purchases. Ownership is permitted in new urban and coastal developments such as the New Administrative Capital, North Coast, and Ain Sokhna. These policies have been met with a positive response, particularly from investors from Lebanon, Syria, Yemen, and Sudan seeking secure and stable investment options. Additionally, Egypt’s citizenship-by-investment and residency initiatives have attracted Arab and foreign capital, particularly in the high-end real estate segment.
Implications for the Egyptian Market
Saudi Arabia’s decision to open its property market to foreigners will inevitably have ripple effects across the region particularly for Egypt, which has long been a preferred destination for Arab investors, especially from the Gulf.
A Partial Shift in Investment Direction
With Saudi Arabia now offering a well-regulated and secure investment environment, some Gulf and foreign investments that might have previously flowed into Egypt could now be redirected to the Kingdom. The scale of Saudi mega-projects and legal clarity offer a competitive advantage in attracting capital.
Regional Competitive Pressures
Egypt’s real estate sector may feel increased pressure to enhance its competitiveness. This could drive improvements in the investment climate, simplification of property ownership processes for foreigners, and the development of more attractive and high-return investment products tailored to global investor expectations in terms of quality, transparency, and payment flexibility.
Opportunities for Egyptian Developers
The Saudi policy shift also presents an opportunity for experienced Egyptian real estate developers to expand into the Gulf market. With a track record in delivering diverse residential and commercial projects, Egyptian firms may find lucrative opportunities for collaboration or direct development within the Kingdom’s rapidly evolving property landscape.
A Call to Reassess Egypt’s Property Policies
The Saudi decision offers a timely prompt for Egyptian authorities to reevaluate foreign ownership frameworks specifically in terms of permissible locations, registration mechanisms, and investor safeguards to ensure the country remains a competitive regional player considering the shifting investment dynamics.
Conclusion
The opening of Saudi Arabia’s real estate market to foreign ownership is not merely a legal reform it is a strategic shift in the Kingdom’s economic philosophy. This bold move reflects Saudi Arabia’s commitment to building a diversified, investment-friendly economy and will undoubtedly reshape the regional real estate map.
By fostering greater transparency, attracting global capital, and encouraging innovation in development, this policy positions the Kingdom as a regional leader in real estate modernization. The key question now is whether other countries in the region will follow suit with similar reforms and whether local developers are prepared to adapt to this new dynamic era of transnational real estate investment.
The coming years will provide the answers, but for now, Saudi Arabia stands at the forefront of the regional real estate scene confident, ambitious, and open for business.