Starting in January 2026, the Saudi real estate sector will enter a new regulatory phase with the implementation of the non-Saudi real estate ownership system, in a move that reflects the Kingdom's direction towards enhancing the attractiveness of foreign investment and developing the real estate market within a balanced framework that preserves national interests. This system is seen as one of the future drivers to reshape the supply and demand map, raise the efficiency of the sector, and support economic growth targets.
Increasing real estate supply
<Last July, the Ministry of Municipalities and Housing revealed the details of the non-Saudi real estate ownership system, confirming that it comes as an extension of real estate legislation aimed at developing the sector and enhancing its role in attracting foreign direct investment. According to the ministry, the system is expected to contribute to increasing the real estate supply by attracting foreign investors and real estate development companies, supporting the diversification of the national economy and increasing the contribution of the real estate sector to GDP. <In terms of the expected effects on the market, the opening of ownership to foreigners within specific geographical areas, especially in the cities of Riyadh and Jeddah, is likely to stimulate the investment movement and raise liquidity levels in the market. It may also contribute to the development of quality real estate projects, improve the quality of residential and commercial products, strengthen partnerships between local and international developers and transfer international expertise to the Saudi market.
A qualitative leap in the real estate market
Mohammad Al-Mimouni, financial advisor at Arab Trader, confirmed that the Non-Saudis owning real estate inside the Kingdom will make a qualitative leap in the real estate market and reflect positively on many related economic sectors, including the stock market, real estate development companies, and banks.
In an interview with Asharq Al-Arabiya, Mohammed Al-Mimouni said that the new system will bring about a paradigm shift in the real estate market and reflect positively on many related economic sectors. <Speaking to Al Sharq, Al Maimouni explained that the decision would ignite competition among real estate companies by accelerating the pace of development of residential units and offering more diverse and quality products to meet the expected new demand from foreign investors. He pointed out that expanding the investor base will open new horizons for real estate development companies and boost sales volume, adding that the new system will lead to a rise in demand for raw land, prompting companies to expand into new projects in and around major cities.
Mimouni said that the decision will ignite competition among real estate companies by accelerating the pace of development of residential units and offering more diverse and quality products to meet the expected new demand from foreign investors.
As for the financial sector, Al-Mimouni expected Saudi banks to witness a remarkable growth in the portfolios of real estate financing and personal financing, driven by the increasing appetite of foreigners to buy real estate in the Kingdom, which is a strong boost to the finance sector in general.
Mimouni said that the new system will lead to an increase in demand for raw land, which will push companies to expand new projects in and around major cities.
Setting geographic ranges for ownership
<The Ministry of Municipalities and Housing emphasized that the updated system took into account national interests through clear mechanisms to control the market and prevent any potential imbalances. This includes defining geographical ranges for ownership and setting special requirements for owning real estate in the regions of Mecca and Medina, given their religious and social specificity, in order to maintain societal balance and real estate stability.The General Authority for Municipalities and Housing (GAMH) will be responsible for the ownership of real estate in Mecca and Medina. <The General Real Estate Authority will be responsible for proposing the geographical ranges in which non-Saudis are allowed to own real estate or acquire rights in kind, and the Executive Regulations of the Non-Saudis Ownership System includes 15 articles covering the procedural, supervisory and regulatory aspects of real estate ownership by non-Saudis, whether individuals, companies or non-profit entities within the Kingdom. The most prominent of these articles are: Defining the procedures to be followed by non-Saudis to own real estate of various types within the Kingdom, imposing a fee on the disposal of the property by non-Saudis to ensure justice and achieve economic interest, and including a table that classifies violations of the provisions of the law and its executive regulations, with associated penalties, which enhances control and regulation in this sector.
Regulation aims to strengthen control and regulation in this sector. <The regulation aims to establish a clear legal framework that ensures the transparency of real estate transactions and limits violations, while encouraging foreign investments according to thoughtful controls that serve the urban and economic development in the Kingdom. The Ministry emphasized that the regulation is in harmony with the provisions of the privileged residency system, and with the regulation of ownership of real estate by GCC nationals within member states for residential or investment purposes, in addition to its compatibility with other applicable regulations, which enhances the clarity of the legislative environment and increases investor confidence.
<In terms of long-term implications, the system is expected to contribute to enhancing the stability of the real estate market, reducing uncontrolled speculation, while ensuring that foreign ownership does not affect the ability of citizens to own property. This is part of a broader Saudi trend to create an advanced real estate environment based on responsible regulation that balances investment openness and the protection of the highest national interest, supporting a more mature and competitive real estate sector in the coming years.
The system is expected to contribute to enhancing the stability of the real estate market, limiting uncontrolled speculation, and ensuring that foreign ownership does not affect the ability of citizens to own property.
