Coding real estate in Saudi Arabia: Innovative legislation and promising economic role

Dr. Khalid Al Habashan

<The world is witnessing a major shift in the way real estate assets are handled, as the concept of real estate tokenization using blockchain technology has become one of the most prominent modern investment and economic trends. The concept is based on the conversion of real estate property or part of it into tradable digital tokens, so that an investor can buy small stakes in huge real estate properties that were previously inaccessible. This transformation is not only a technological innovation, but also a strategic economic tool that can change the shape of the real estate market and open wide horizons for financing and investment.

<The core benefit of tokenization lies in its ability to make the market more inclusive and equitable. In the traditional model, owning real estate required a large amount of capital, making investment the preserve of a limited number of large investors. Through tokenization, small investors can enter with relatively small amounts of money, thus creating a kind of investment democracy that increases individual participation and market depth. In addition, tokenized assets are able to trade on digital secondary markets, giving the property a liquidity that was previously unavailable and allowing the investor to exit the investment more easily.

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International experiences

International experiences reflect the success of this model. Dubai launched the region's first real estate tokenization platform in collaboration between regulators and local banks, allowing the purchase of tokenized shares starting at just AED 2,000. This experience has put Dubai at the forefront of countries that have integrated real estate into the digital economy and opened its markets to investors from around the world through secure and regulated electronic portals. In Qatar, the Qatar Financial Center has announced projects worth more than $500 million to tokenize multi-use real estate assets, while in the United States and Europe, several platforms have emerged to offer tokenized real estate funds, reinforcing a global trend towards adopting this technology as part of the financial system.

In Saudi Arabia, it can be said that Dubai is at the forefront of integrating real estate with the digital economy, opening its markets to investors from around the world through secure and regulated portals. <In Saudi Arabia, it can be said that the first start has already begun, with some tech companies in collaboration with local developers announcing the implementation of the first tokenized real estate transactions in 2025. This move has put the Kingdom on the map of real estate innovation, especially as regulators such as the Capital Market Authority (CMA), the General Real Estate Authority (GRA) and the Saudi Central Bank (SAMA) have begun studying the necessary frameworks to legalize this activity and ensure its compatibility with existing financial legislation. The unified real estate registry is expected to play an important role in linking digital and physical ownership, which will give confidence and transparency to both local and international investors.

Attracting investments

The economic role of real estate tokenization is not only to attract investments, but also to stimulate urban development and facilitate the financing of major projects. A real estate developer who used to rely on bank financing or off-plan sales is now able to offer their assets as tokens, allowing them to reach a broader base of investors at a lower cost and with greater flexibility. This system also enhances the country's ability to diversify sources of income within the framework of Saudi Vision 2030 by transforming the real estate sector into a more attractive and liquid investment platform.

Despite these advantages. <Despite these advantages, the biggest challenge remains the development of an integrated legislative framework that clearly defines the rights and obligations of owners, and separates assets encoded as securities regulated by the Capital Market Authority (CMA) from unregulated trading. The aspect of cybersecurity and the protection of investor data also needs innovative solutions to ensure the safety of digital assets. However, current indications are that the Kingdom recognizes these challenges and is working to address them with measured steps, just as it has done when introducing new investment products in the past.
It is clear from the above that tokenization of real estate in Saudi Arabia is not just a technical initiative, but an integrated economic project that holds great promise for investors and the national economy alike. Although the experience is still in its infancy, the expected legislative and regulatory support, coupled with the Kingdom's desire to strengthen its position as a regional financial and investment center, makes it likely that in the next few years we will see an integrated digital real estate market that contributes to increasing transparency, expanding the investment base, and diversifying sources of growth. Hence the importance of this transformation as a strategic step towards a more efficient and competitive real estate and economic future. Consultant in corporate governance and real estate investment regulation
@AlhabshanDr