Saudi Arabia has decided to allow foreign nationals to purchase property in the kingdom, with implementation set to begin in January 2026. was made during a cabinet meeting held on July 8, chaired by Crown Prince Mohammed bin Salman. While Saudi Arabia has previously allowed foreigners to own property, the new law will introduce additional facilities and incentives. However, the government has also decided to impose certain conditions once again. This policy aims to attract foreign investment and foreign currency, as part of Saudi Arabia’s Vision 2030, which seeks to diversify the kingdom’s economy and reduce its dependence on oil revenues. The legal, regulatory, and financial frameworks for this decision will be published on “Istitlaa”, the Saudi government’s official public consultation platform. So far, one of the conditions that has been made clear is that non-Muslim foreigners will not be allowed to reside in Mecca and Medina, the two holiest cities in Islam. Saudi real estate expert Khalid Al-Mubayed expressed optimism that under this new system, foreigners will receive more benefits, the property registration process will be expedited, and clear regulations will be enforced.
Non-Muslim foreigners will not be allowed to reside in Mecca and Medina.
What is new in this decision?
In the past, foreigners were only allowed to purchase residential property in Saudi Arabia. However, under the new amended law, foreigners will now be able to buy commercial and industrial properties as well. This means that foreign nationals will be permitted to invest in the real estate sector in a way that differs from the previous law. According to Khalid Al-Mubayed, the earlier law contained several complex clauses, and it could take months to obtain the necessary approvals to purchase residential property. For example, under the old law, foreigners were not allowed to buy property in Mecca and Medina. However, with this new decision, Muslim foreigners may now be allowed to purchase property in those two cities. Under the previous law, any foreigner wishing to buy property had to be a legal resident of Saudi Arabia. In addition, foreigners were required to obtain a business license. Al-Mubayed added, “It is still unclear whether non-resident foreigners will be allowed to purchase property under the new system.”
How will this decision affect Saudi citizens?
Some observers believe that this decision could harm Saudi citizens, as it may lead to an increase in property prices and greater competition among investors. As a result, it could become more difficult for low-income Saudi citizens to purchase property or invest in the real estate sector. In September 2024, the Saudi newspaper Okaz reported that apartment rents in Saudi Arabia had been rising consistently over the past five years. Citing data from the General Authority for Statistics, Okaz noted that residential rents increased by 10.7% in August 2024. However, construction expert Khalid Al-Mubayed, the government has prioritized the interests of Saudi citizens when making these decisions. He further stated that under the new system, certain areas will be designated exclusively for Saudi nationals. According to the Saudi Press Agency, the Minister of Municipal Affairs, Majid bin Abdullah, also confirmed that the new framework will safeguard Saudi citizens’ interests, with mechanisms in place to ensure market regulation and maintain balance in the real estate sector.
What impact will this decision have on the Saudi economy?
In Saudi Arabia, profits from the real estate sector contribute only 6.5% to the country's GDP. This raises the question: Does Saudi Arabia need to open up this sector to foreign investment? According to Khalid Al-Mubayed, the country is now “more attractive and ready,” and the real estate market is capable of meeting “the needs of new incoming investors.” He further stated that the real estate market supports over 80 industries both directly and indirectly, and this expansion will create a large number of job opportunities. According to Al-Mubayed, the new decision will bring fresh investment into the construction sector and help reduce Saudi Arabia’s dependence on oil. “This is not just about buying residential property,” he added, “but also includes the purchase of factories and commercial assets.” Under current conditions, a foreigner needs to have a minimum of 4 million riyals to purchase property and obtain residency in Saudi Arabia.
To acquire residence in Saudi Arabia, a property buyer must have at least 4 million riyals.
Powered by Froala Editor
