International real estate market in Saudi Arabia presents a secure avenue for lucrative profits to foreign investors
Saudi Arabia has taken a significant step forward in opening its real estate sector to foreign investment, with the Saudi Cabinet approving a new law in July 2025 that allows non-Saudis to own property in the Kingdom from January 2026[1]. This move marks a significant departure from previous restrictions, positioning Saudi real estate as a more accessible, globally integrated market.
The new law aligns with existing frameworks such as the Premium Residency Programme (Iqama) and regulations for Gulf Cooperation Council (GCC) citizens, which already permitted some cross-border ownership[2]. The move is part of the Kingdom’s broader Vision 2030 strategy, which aims to diversify the economy beyond oil and attract foreign direct investment (FDI)[1][2].
Structural and regulatory advancements are expected to catalyse new inflows of capital into the market. For the first time, foreign nationals (beyond GCC citizens and premium residency holders) will be able to directly buy real estate in Saudi Arabia starting January 2026[1][2]. This is expected to boost demand, particularly in high-profile developments such as NEOM, the Red Sea Project, and Diriyah[1][3]. These projects feature advanced infrastructure, smart technologies, and sustainable urban planning, enhancing the sector’s readiness for sophisticated international investors[3].
However, experts note that while the legal framework is a positive step, further clarity is needed on key issues such as mortgages, capital repatriation, and the specific property rights extended to foreigners[1]. These details will be crucial for the practical implementation and attractiveness of the market to global investors.
Real estate remains a pillar of Saudi Arabia’s FDI, with corporate lending in the sector surging 40.5% in 2024 to SAR 374.5 billion[3]. This growth is driven by both residential demand and the development of large-scale, mixed-use, and tourism-oriented projects[3]. The entry of foreign investors is expected to diversify property offerings, improve supply dynamics, and raise the quality of available housing and commercial spaces[2]. The sector supports over 80 related industries, underscoring its systemic importance to the national economy[2].
Precise geographical boundaries and specialized requirements for holy cities (Makkah and Madinah) remain in place to ensure market stability and protect citizen interests[2]. The actual impact will depend on how the new regulations are implemented, particularly regarding financial services (mortgages, repatriation), property rights, and the transparency of transaction processes[1].
While the reforms are expected to boost demand, challenges such as rising prices in major cities and the need for affordable housing remain[1]. With only 0.36% of the Kingdom’s land currently developed, there is significant potential for expansion, but this will require ongoing investment in infrastructure and urban planning[2].
In conclusion, Saudi Arabia’s real estate market is on the cusp of a historic opening to foreign investment, with legal barriers set to fall in January 2026[1][2]. The sector is buoyed by strong fundamentals, ambitious megaprojects, and regulatory reforms aligned with Vision 2030[2][3]. However, the full potential of this transformation will depend on the clarity and effectiveness of the new regulatory environment, as well as the Kingdom’s ability to deliver on its infrastructure promises and maintain market stability as foreign capital inflows increase[1][2].
Advancing to an April 2026 operational window will depend on top-level prioritisation of the law and dedicated interministerial task forces. Foreign investors can potentially buy into megaprojects such as Neom's The Line, Oxagon, and Diriyah in Saudi Arabia. The Ministry of Investment will streamline foreign investment approvals, and the Ministry of Interior will integrate land-registry data with security protocols.
In comparison, the average gross rental yield in the US is 6.68% as of the second quarter of 2025, with some cities exceeding 20%. Compared to Dubai, the US, and the UK, Dubai delivers rental yields between 5% and 11%. In the UK, the average buy-to-let gross yield stands at 5.60%, with cities like Sunderland and Aberdeen offering yields above 8%.
- The new law, approved by the Saudi Cabinet in July 2025, allows non-Saudis to own property in Saudi Arabia starting from January 2026, which is a significant step in the Kingdom’s broader Vision 2030 strategy to diversify its economy beyond oil and attract foreign direct investment.
- The move positions the Saudi real estate market as a more accessible, globally integrated one, and foreign nationals (beyond GCC citizens and premium residency holders) will be able to directly buy real estate in Saudi Arabia starting from January 2026.
- With the new law, Saudi Arabia aims to attract more foreign investment in its real estate sector, particularly in high-profile developments such as NEOM, the Red Sea Project, and Diriyah, which feature advanced infrastructure, smart technologies, and sustainable urban planning.
- While the legal framework is a positive step, further clarity is required on key issues such as mortgages, capital repatriation, and the specific property rights extended to foreigners for the practical implementation and attractiveness of the market to global investors.
- The entry of foreign investors is expected to diversify property offerings, improve supply dynamics, and raise the quality of available housing and commercial spaces, with the Kingdom’s real estate sector supporting over 80 related industries and remaining a pillar of its FDI.
