After driving about an hour north of Riyadh, the sand dunes gradually fade away, replaced by the outline of an emerging city stretching as far as the eye can see, with thousands of new homes for families in a landscape that would look familiar to any suburban neighborhood in the United States. The project, known as Khuzam, which is worth more than 100 billion Saudi riyals (about $27 billion), is a living example of Saudi Arabia's ambitions to address the housing affordability crisis, which is plaguing major cities from New York to Sydney, according to Bloomberg.
The Khuzam project is not only a huge residential complex, but reflects a broader trend led by the Kingdom to reshape the real estate market, as part of Crown Prince Mohammed bin Salman's vision to attract foreign investors and buyers, and enhance the role of the real estate sector as a major tributary to support the economy.
The National Housing Company (NHC), the Kingdom's largest government-backed real estate developer, is leading this transformation, with a portfolio of projects estimated at 250 billion riyals spread across the Kingdom. The company is pouring billions of riyals into large-scale urban development projects, while several private companies have entered the construction race, reflecting the growing momentum in the market. The Saudi market has also attracted the Trump Organization, the real estate development company of the US president's family, which is working with a Saudi partner to develop luxury apartments in the kingdom.
The accelerated activity is being fueled by new regulatory reforms expected to take effect in January, allowing foreign buyers to own real estate within the Saudi market. The move coincides with other reforms, including the opening of the Saudi stock market this week to all foreign investors, in the latest move to boost capital inflows into the Middle East's largest market.
Attracting international buyers and investors
Allowing foreigners to own property is a long-awaited move that developers hope will attract international buyers and investors to a market that has been largely closed to non-Saudis for decades. The kingdom has been gradually easing some restrictions on foreign residents and is now moving to identify projects and areas where foreigners are allowed to buy. However, this opening poses the parallel challenge of providing a sufficient supply of new housing to ensure that prices are not too high for Saudi citizens.
Matthew Green, head of MENA research at CBRE Real Estate, said the new law «will be a real shift in the market,» noting that there is «a huge amount of capital willing to come in, both in terms of development and financing.».
Enthusiasm is evident in the Saudi real estate market, especially in comparison to Dubai, where freehold laws have boosted supply and demand and attracted investors from India, Britain and Russia. In Saudi Arabia, developers have already started marketing their projects outside the country, building networks with real estate brokers around the world.
However, there are still challenges in terms of lifestyle appeal, as many wealthy foreigners have opted to buy second homes in Dubai for its more open tourism and entertainment environment. In contrast, Saudi Arabia's social norms are still more conservative, and despite the recent addition of new tourist resorts and the easing of some restrictions, Riyadh still lacks some of the lifestyle benefits of other global cities.
But some investors see the Saudi market as a more stable bet compared to Dubai, whose demographic economy relies heavily on expatriates, some of whom left during previous recessions. In contrast, Saudi Arabia has a strong population base of around 35 million people, of which around 20 million are citizens, providing a solid foundation for future demand. Government data indicates that around 34% of Saudis are under the age of 14, which is likely to increase demand for housing in the coming years.
Sanam Wakil, director of the Middle East and North Africa program at Chatham House, said that the housing sector is a key pillar of the crown prince's vision, as it is linked to multiple internal dynamics, stressing that achieving internal legitimacy requires concrete policies and real transformations that meet the aspirations of the younger generation.
The new law is also expected to revive major projects launched by the government, but which may face financing difficulties on their own, such as Diriyah and Qiddiya, given their proximity to population centers and potential quick return on investment. The new system will also allow foreign developers, suppliers, and contractors to enter the market through partnerships with local companies, on more balanced terms.
According to Knight Frank data, more than 600,000 housing units are expected to be built in Saudi Arabia by 2030, with 110,942 units scheduled for delivery in 2026 alone.
But challenges remain, especially on the affordability front. Apartment prices in Riyadh rose by 96% between early 2019 and Q3 2025, while villa prices jumped by 53%. Internal migration to Riyadh in search of job opportunities, along with an influx of expats as companies relocate their regional headquarters to the kingdom, has put pressure on rents, which have risen by an average of 8.5% per year, according to CBRE.
In an attempt to curb this rise, the crown prince issued directives to freeze rent increases in Riyadh for five years, pledging to stop what he described as an «unacceptable» rise in real estate prices. Experts emphasize that controlling prices requires accelerating the pace of construction of modern and affordable housing.
The National Housing Company (NHC) has a pivotal responsibility in this process. CEO Mohammed Al-Batti has been tasked with raising the homeownership rate to 70% by 2030, requiring the construction of hundreds of thousands of housing units. To date, the company has completed about 60,000 units, but Al-Batti expects the pace of delivery to accelerate in the coming years after overcoming several logistical and supply chain hurdles.
To achieve this goal, the company has partnered with developers from New Jersey to Egypt and construction companies from China and South Korea to boost production capacity and build localized supply chains. The company currently has more than 164,000 residential units under construction in Jeddah, Dammam, Makkah and Madinah.
Al-Batti stressed that the projects are not limited to building housing only, but aim to create a «city within a city» that includes all basic services and facilities, including schools, health centers, recreational and commercial areas. The company achieved record sales in 2024 of SAR 27 billion, while sales in 2025 exceeded SAR 30 billion, as demand for new residential communities increases.
American style in residential projects
This shift reflects a clear social change. American-inspired residential communities that combine living, working, and entertainment are replacing traditional residential towers. In one of Khuzam's newly completed neighborhoods, families appeared to be enjoying the green spaces close to their homes, a sight that was uncommon years ago, when many Saudis preferred detached homes with high walls.
With the rising cost of living, many young Saudis are opting for apartments, townhouses and shared facilities, rather than the traditional housing pattern of previous generations.
Abdulrahman Al-Daiham, CEO of Liwan Real Estate Development, is planning to launch a new Riyal 4.5 billion project with 2,500 residential units and a 300-room hotel in the capital. After previous investments in Turkey and Dubai, he believes the future is in the local market, especially with the impending opening of ownership to foreigners.
He noted that regional investors are increasingly interested, in addition to a Chinese fund that has expressed interest in investing in one of the company's projects. Experts, including Matthew Green, expect major institutional investors to enter the Saudi market at a faster pace than in Dubai, given their accumulated experience in the region's markets.
The Bloomberg report concludes that the new rules will open the door to more investments, developers and partnerships, as Saudi Arabia prepares for a new phase of large-scale real estate and economic transformation.
