Saudi Arabia to Open Real Estate Market to Foreign Ownership in 2026

In a landmark regulatory shift, Saudi Arabia is set to allow foreign ownership of real estate properties starting in January 2026. Under the new policy, foreign individuals and companies can purchase residential, commercial, agricultural, and industrial real estate across the Kingdom. This move aligns with Saudi Arabia's Vision 2030, aiming to diversify the economy and attract significant foreign direct investment. The Kingdom plans to designate specific zones in key cities like Riyadh, Jeddah, Makkah, and Madinah for this purpose, with details to follow soon.

Royal Decree No. M/14: The New Legal Framework

According to Travel And Tour World, the new legal framework, enacted via Royal Decree No. M/14 in July 2025, replaces a two-decade-old statute. This updated law permits foreigners to buy property and aims to stimulate the real estate sector and boost transparency. The Real Estate General Authority (REGA) will oversee this initiative, ensuring that foreign ownership adheres to urban planning regulations and economic stability goals.

Geographical Zones and Ownership Limits

The Kingdom has identified specific zones in cities such as Riyadh and Jeddah for foreign real estate investments. As noted in The Middle East Observer, ownership quotas are under review, with early guidelines suggesting a 70-90% foreign ownership cap, depending on the zone. Foreign Muslims will have opportunities to purchase property in Makkah and Madinah, though restrictions apply to ensure cultural and religious considerations are respected.

Investment Opportunities in Mega-Projects

The reform opens avenues for foreign investment in Saudi Arabia's mega-projects, such as NEOM, Qiddiya, and the Red Sea Global initiatives. As highlighted by The Times of India, foreign ownership in these developments will be encouraged, offering diverse investment opportunities across residential, commercial, and industrial sectors.

Stakeholder Views and Economic Impact

Industry experts are optimistic about the potential economic impact of this policy. According to Positive Pakistan, the reform is expected to increase market transparency and drive urban development. "This shift not only diversifies the economy but also enhances Saudi Arabia's global investment competitiveness," says Maya Tarek, Senior Analyst at RealEstateAbroad.com.

"This shift not only diversifies the economy but also enhances Saudi Arabia's global investment competitiveness,"

Regulations and Future Implications

As Saudi Arabia finalizes regulations for this policy, the Kingdom aims to create a secure and balanced investment environment, as noted by The Tribune. Fractional property ownership will also be introduced, allowing investors to purchase tokenized stakes in real estate. This innovative approach could catalyze further foreign investment, offering greater flexibility and accessibility to global investors.

Key Takeaways for Global Investors

For international real estate investors, Saudi Arabia's new policy presents numerous opportunities across various sectors. Prospective buyers should focus on freehold zones, assess fee structures early, and consider investment in mega-projects. The Kingdom's real estate market is poised for transformation, presenting lucrative opportunities for those willing to navigate the new landscape.

• Target designated zones for compliance with ownership regulations.
• Evaluate investment prospects in mega-projects like NEOM and Qiddiya.
• Consider fractional ownership for diversified investment portfolios.