A strategic shift is expected to reshape the Saudi real estate market, after the Council of Ministers approved the non-Saudi real estate ownership system last Tuesday, opening the door wide for foreign capital to enter one of the most vital sectors of the Saudi economy.

The move comes within the framework of the Kingdom's Vision 2030. <This step comes within the framework of the Kingdom's Vision 2030, and at the same time raises legitimate questions about its implications on real estate supply, prices, and citizens" opportunities to own property... Are we witnessing a real estate boom or a wave of inflation in real estate prices?

What does the new system mean? The Ministry of Municipalities has revealed the details of the new system for non-Saudis to own real estate, noting that it represents an extension of real estate legislation aimed at stimulating growth in the sector and enhancing its attractiveness to foreign direct investment, thus contributing to supporting the national economy and diversifying sources of income.

The Ministry of Municipalities has revealed the details of the new system for non-Saudis to own real estate. Under the system, non-Saudis will be allowed to own property within specific geographical ranges, especially in the cities of Riyadh and Jeddah, while ownership in Mecca and Medina is subject to strict controls due to their religious and social sensitivity.

Direct implications for real estate supply

<The most striking aspect of the modernized system is its expected role in increasing the supply of real estate by attracting foreign developers and international investors. This expected increase in supply will enhance the balance between supply and demand and reduce real estate bottlenecks that may contribute to rising prices.

Specialists believe that the new system will increase the supply of real estate by attracting foreign developers and international investors. Specialists believe that the entry of foreign capital will inject new investments in housing, commercial and hospitality projects, which will contribute to enhancing the stock of both residential and commercial units, and increase the diversity of options for the local consumer.

Will real estate prices be affected?

While high real estate supply may contribute to restraining prices, the entry of foreign investors may, in some areas, raise the market value of real estate due to increased demand for prime locations, especially in major cities such as Riyadh and Jeddah.

The results of this trend will depend on the nature of the practical application of the system and the ability of regulators to control the market and prevent any monopolistic or speculative practices that may negatively affect ownership prices for citizens.

Strict control mechanisms

The Ministry of Municipalities and Housing confirmed that the system took into account national interests through clear mechanisms to control the real estate market, ensuring compliance with regulatory procedures aimed at maintaining a balance between the interests of foreign investors and the rights of citizens.

The General Authority for Real Estate will also propose the geographical ranges in which foreign ownership is allowed, with a commitment to launch the executive regulations of the system within 180 days on a ”consultation" platform, to ensure the involvement of the community and interested parties in discussing the details of the implementation of the system, before its entry into force in January 2026.

Ministry of Municipalities and Housing.

Consolidating transparency and stability

The competent authorities emphasize that this approach is not a concession to the gains of citizens, but aims to create a stable and sustainable real estate environment, characterized by transparency and discipline, by enabling the regulatory authorities to effectively follow the movement of the market, and to set precise requirements to ensure that there is no negative impact on the middle and low-income groups.

The new system comes in an integrated manner. <The new system is integrated with the privileged residency system and the regulations for the ownership of GCC citizens, which enhances the integration of the real estate legislative system in the Kingdom. It also gives the foreign investor legal and investment clarity, and reflects the maturity of the Saudi regulatory environment, which is now managed with a precise economic methodology that balances between attracting investment and protecting national interests.

The new system comes integrated with the privileged residency system and the regulations for the ownership of GCC citizens.