Tuesday 08/07/2025 marks a historic moment for the real estate sector in Saudi Arabia. The Crown Prince Mohammed Bin Salman bin Abdulaziz Al Saud approved a system that opens Saudi real estate to foreign ownership. What it means is that Saudi Arabia will now permit foreigners to purchase real estate property in specified zones beginning January 2026.
Now, this is a big deal for both the investors and the future of the Kingdom’s real estate.
Let’s take a look at the progress from a historical point of view.
Real Estate Foreign Ownership History
For decades, Saudi Arabia has had strict regulations on land ownership. Foreigners, whether individuals or companies could not freely buy real estate property.
Exceptions were few with considerable number of hurdles. Some investors could gain access through companies registered in the Kingdom. Others could lease long-term. But owning land outright? That was rare, especially in key cities.
Even Muslim pilgrims visiting Mecca or Medina weren’t allowed to own property there despite their deep connection to the holy sites.
Compare that to the UAE, where Dubai’s real estate boom has been powered by foreigners buying holiday homes and skyscrapers. Saudi Arabia, on the other hand, stayed mostly fenced off. Until now! This is why the cabinet resolution remains to be one of the greatest breakthroughs in the history of foreign ownership in the real estate sector.
What’s the New Real Estate Ownership Law All About?
Starting in January 2026, non-Saudis will be allowed to buy residential, commercial, and even agricultural property under certain conditions.
The law applies to individuals and companies. However, buying property in Mecca and Medina will come with extra strings attached. The new system takes into account economic and investment aspects to ensure adequate protection and regulation while enhancing investment into the real estate sector.
The Real Estate General Authority has been tasked with finalizing the details. These will cover which areas are open to foreign buyers, how to apply, and importantly, how not to violate the law. Think of it as a real estate roadmap, with GPS set to “Don’t mess this up.”
Expect those regulations to be made public before the 180-day window closes in January 2026.
The Timely Approval for Real Estate
You may ask, why open the real estate sector now?
Saudi Arabia has spent the last few years launching massive infrastructure projects such as NEOM, Qiddiya, the Red Sea Project which are worth hundreds of billions of dollars.
These cities need residents, businesses, hotels, and services. And all that needs investment.
Opening the door to foreign property buyers gives the Kingdom a powerful tool that is global capital. It also boosts confidence. If you’re invited to own a piece of the future, you’re more likely to invest in it.
It’s not just about money. It’s about sending a signal: Saudi Arabia is open for business and it could be time for real estate business.
What Could Go Wrong?
Breaking through initially protected territories such as this comes with unfounded fears. Foreign influx has been associated with attacks on the local culture and possible deviation from the industry norms. So, we ask the question, what Could Go Wrong?
Of course, some risks come with rolling out the welcome mat. Property bubbles could set in based on speculations. Gentrification, which is the displacement of inhabitants for the benefit of wealthy individuals of foreign origin, is also a possibility. Another feared possible outcome is condos with no parking cropping from the neighborhoods.
But the new law includes protections to balance citizen interests and foreign investment. Regulatory oversight, restricted zones, and eligibility filters are expected to keep things grounded.
Think of it as a skyscraper with a very solid foundation. Put in other words, all possible risks are already included in the regulation making this initiative suitable for the Kingdom.
Read Also: Home Ownership Trends in Saudi Arabia
In Sum…
The countdown is on. By January 2026, we’ll see the real impact of this policy. Will foreign buyers flock to Riyadh and Jeddah? Will Saudi Arabia follow Dubai’s high-rise example? Or carve a path of its own?
One thing is clear: history is shifting under the hot desert sun. And for the first time, foreigners might not just visit Saudi Arabia, they may just call it home.