Saudi Arabia opens property ownership to foreigners

Saudi Arabia has moved to open its real estate market to foreign ownership, marking one of the most consequential shifts in the Kingdom’s investment policy as it seeks to diversify its economy and deepen capital inflows beyond hydrocarbons. The reform allows non-Saudis to buy a broad range of properties, including residential, commercial, agricultural and industrial assets, with the option to purchase land for construction also permitted.

The change forms part of a wider set of economic measures aimed at attracting long-term investment, stimulating the construction sector and supporting urban development under the country’s economic transformation programme. Officials say the framework is designed to balance foreign participation with safeguards for local communities and planning priorities.

Under the new rules, foreign individuals and companies will be eligible to own property in designated zones across major cities such as Riyadh and Jeddah, while ownership in Mecca and Medina will be permitted within specific areas yet to be formally announced. Authorities have indicated that the geographic scope and technical conditions for ownership in the holy cities are being finalised and will be disclosed shortly, a move closely watched by investors given the religious and cultural sensitivities attached to those locations.

The reform represents a notable departure from previous restrictions that largely confined foreign ownership to limited corporate or long-term usufruct arrangements. By widening access, policymakers aim to channel overseas capital into housing supply, logistics hubs, tourism projects and mixed-use developments that align with national growth priorities. Officials have also highlighted the potential for the policy to encourage knowledge transfer, higher construction standards and new financing models.

Market participants say the inclusion of agricultural and industrial real estate signals an effort to support food security, manufacturing and supply-chain resilience. Foreign-backed agribusinesses and industrial operators are expected to gain greater certainty over land tenure, which can underpin longer-term investment decisions and infrastructure spending.

At the same time, regulators stress that the opening will be managed through zoning rules, licensing requirements and compliance checks. These are intended to prevent speculative excesses and ensure that ownership structures remain transparent. Local authorities will retain oversight of planning permissions and land use, while sector-specific conditions are expected to apply in strategic areas.

Property developers and consultants anticipate heightened interest from regional investors and multinational firms already active in the Kingdom. Demand is likely to focus initially on prime residential districts in major cities, logistics parks linked to ports and airports, and hospitality-led developments tied to tourism initiatives. Over time, analysts expect secondary cities to benefit as infrastructure spending and population growth broaden the investment map.

The policy also intersects with parallel reforms in residency and business ownership. Expanded visa options and incentives for regional headquarters have increased the pool of expatriates seeking long-term residence, which could support demand for owner-occupied housing. Financial institutions are preparing to adapt mortgage products and financing structures to accommodate a more diverse buyer base, subject to regulatory approval.

Despite the optimism, challenges remain. Pricing pressures in certain urban districts, the pace of project delivery and the availability of skilled labour are among the factors that could shape outcomes. Observers also note that clarity on taxation, inheritance rules and resale conditions will be crucial to sustaining investor confidence, particularly for individual buyers.