Saudi Arabia has approved a landmark law allowing foreign property ownership, marking a major shift in its real estate market. Specifically, the reform permits international buyers to invest in Riyadh and Jeddah. However, restrictions remain in Mecca and Medina due to their religious significance.
This decision aligns with Saudi Arabia’s Vision 2030 economic diversification plan. Additionally, it aims to boost tourism and attract foreign investment. Consequently, real estate stocks surged following the announcement. Officials will finalize implementation details before the law takes effect in January 2026.
Dubai’s booming market has set a strong precedent. In fact, high-end property sales in Dubai now rival those in New York and London combined. Similarly, Saudi Arabia hopes to capitalize on global demand for luxury residences.
Despite grand plans, some projects face delays. For example, the futuristic Neom city has scaled back its initial targets. Originally planned for 1.5 million residents by 2030, estimates now suggest fewer than 300,000. Meanwhile, only a fraction of its infrastructure will be ready by the deadline.
Yet, construction continues at a rapid pace. Notably, Riyadh is building the Mukaab, set to become the world’s largest structure. Likewise, Red Sea resorts like the Ritz-Carlton Reserve are already welcoming guests.
Experts say Saudi Arabia has dual goals. First, it wants to keep affluent Saudis from spending abroad. Second, it aims to compete with neighboring Gulf states for foreign buyers.
Dubai remains the regional leader, with prices soaring by 19% in 2024. Interestingly, wealthy Saudis are the top investors in Dubai’s luxury market. Now, Saudi Arabia hopes to redirect some of that demand back home.
While Western tourists are a focus, research reveals another key market. A 2024 report found 79% of high-net-worth Muslims preferred owning property in Mecca or Medina. Although restrictions apply, this pent-up demand highlights long-term potential.
With foreign property ownership now permitted, Saudi Arabia’s real estate sector is poised for transformation. If successful, Riyadh and Jeddah could soon rival Dubai as global investment hotspots.
