Saudi Arabia to allow foreign property ownership in Riyadh and Jeddah
The long-awaited reform, passed on Tuesday, allows foreigners to buy property in specific areas in Riyadh and the Red Sea coastal city of Jeddah. Ownership in Mecca and Medina, the two holiest cities in Islam, is subject to special requirements.
The move prompted a rally in Saudi real estate stocks. Saudi Arabia's Real Estate General Authority is expected to issue more specifics on the rules and implementation. The law is expected to take effect in January 2026.
Opening Saudi Arabia's property market to foreign investment is a crucial part of the kingdom's Vision 2030 plan, which places a strong emphasis on tourism, particularly along Saudi Arabia's Red Sea coast.
Some projects have faced setbacks after years of high spending and slumping oil prices. The kingdom has already had to scale back the futuristic city of Neom. Instead of 1.5 million people living in the city by 2030, Saudi officials now anticipate fewer than 300,000 residents. Meanwhile, only 2.4km of the city will be completed by 2030.
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Still, Saudi Arabia is undergoing a construction boom.
In 2024, the kingdom began construction of the Mukaab, a cube-shaped attraction in Riyadh, which is set to be the world's largest structure. The building will be the main centrepiece of New Murabba, a major development project in downtown Riyadh.
The kingdom is also pressing ahead with Red Sea resorts, some of which, like the Ritz-Carlton Reserve, have already opened.
Saudi Arabia's real estate and tourism goals are twofold, experts say.
Mega-yachts versus sailboats: Saudi Arabia's quest to conquer Red Sea tourism Read More »
The kingdom aims to encourage middle class and wealthy Saudis to spend their money at home rather than abroad.
However, by allowing foreign real estate ownership, Saudi Arabia is also seeking to tap a lucrative market alongside other Gulf states, such as Oman and Qatar, for vacation homes and second residences.
The UAE remains the leader in this space, with Dubai and even Abu Dhabi experiencing double-digit residential property price growth in recent years.
According to a report in June by real estate firm Frank Knight, Dubai residential home prices surged 19 percent in 2024. Demand for Dubai real estate remains highest among high-net-worth Saudi citizens, followed by UK citizens and East Asians.
Notably, the trading for homes priced at $10m and above in Dubai now matches London and New York City combined, Frank Knight said.
Although western media has focused on Saudi Arabia's efforts to push through liberalising social reforms to attract tourists, some research suggests there is also pent-up demand in corners of the global south, including among high-net-worth Muslim individuals.
A Frank Knight report in 2024 found that 79 percent of wealthy Muslim respondents wanted to make their residential property purchase in Mecca or Medina, with budgets above $4m.
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The National
4 hours ago
- The National
What foreigners need to know about buying property in Saudi Arabia
Foreigners will be able to buy real estate in designated areas in Saudi Arabia from January 2026. Housing Minister Majed Al Hogail told the Saudi Gazette on Wednesday that 'ownership will be permitted within specific geographic areas − particularly in the cities of Riyadh and Jeddah − with special requirements for ownership in Makkah and Madinah'. In January, the kingdom allowed foreigners to invest in publicly listed local companies that own real estate in Makkah and Madinah. Saudi Arabia has taken several measures to boost its attractiveness as a global investment destination as part of its Vision 2030 plan to wean the economy off its dependency on oil revenues. Here's what you need to know about buying property in Saudi Arabia: Where can foreigners buy property in Saudi Arabia? Starting January 2026, international buyers will gain access to the Saudi real estate market within designated areas. While Riyadh and Jeddah are likely to be prioritised for foreign ownership, Makkah and Madinah will have specific conditions or restrictions. Not all areas will be open to foreign ownership. The Real Estate General Authority, the regulatory body for real estate in Saudi Arabia, will define the permitted zones and their conditions in the forthcoming executive regulations. 'The law includes geographic restrictions to maintain cultural, religious and regulatory sensitivities. These measures aim to balance international investment with national interests and community integrity,' says Amar Hussain, associate partner, research – Middle East, at real estate consultancy Knight Frank. The law is expected to permit ownership of various asset types, including residential and commercial properties and possibly agricultural land, subject to specific location-based conditions and oversight, Mr Hussain adds. Most of Saudi Arabia's future projects are in Riyadh and Jeddah as the kingdom prepares for the Fifa World Cup in 2034. In addition, the 2029 Asian Winter Games will be another opportunity to showcase the development work in the kingdom, according to Junaid Ansari, director of investment strategy and research at Kamco Invest. Who can buy under the new scheme? The new law is understood to include both foreign residents and non-resident foreigners, effectively opening the kingdom to a global investor base, Matthew Green, head of research at CBRE Mena, says. In other similar moves within the region − namely the UAE, Qatar and Oman − this has led to the start of a new real estate cycle and subsequent positive value growth in the preceding years, as 'improved ownership title, new regulations, bigger addressable market and wider source markets' help to transform the real estate landscape, he explains. Why buy in Saudi Arabia? The local demand is significant and there is an undersupply in the residential sector. Also, prices in Saudi Arabia are still broadly lower than similar property prices in the UAE, according to Mr Ansari. House prices in the designated international investment zones are likely to perform better, or grow faster than the rest of the market, where the rate of house price growth is likely to slow as domestic households move into longer holding patterns before they are able to transact, according to Faisal Durrani, head of research Mena at Knight Frank. Can foreigners buy property in the kingdom today? International buyers and investors are already able to access the property market in the kingdom under the property-ownership linked premium residency visa, which was launched in January 2024, Mr Durrani says. The conditions attached to this are a minimum spend of 4 million Saudi riyals ($1.1 million) and that the properties must be fully completed and mortgage-free, he informs. Separately, this January, laws were amended to permit international investors to access property markets in the holy cities of Makkah and Madinah through listed property development companies. 'In the wake of Vision 2030 and the subsequent giga project announcements, demand from international buyers for homes in the kingdom has been building on the sidelines,' Mr Durrani says. 'This demand is strongest among global Muslim high-net-worth individuals who are non-residential in the kingdom. In fact, 86 per cent of global Muslim HNWIs are keen to own a home in the kingdom, with the majority focused on the Makkah and Madinah.' Mr Green of CBRE says ownership in the kingdom is currently restricted to those participating in the premium residence scheme through licensed foreign developers and other indirect ownership vehicles, including real estate funds or through shares in a publicly listed company. What can you buy? The new law is expected to permit a broader scope for foreign ownership, with individual units and buildings across designated areas, Mr Green says. 'Opening the market up to international buyers and investors is something that has been long anticipated,' Mr Durrani says. This will facilitate greater international investment, while ensuring that Saudi nationals aspiring to own a home are not necessarily competing directly with global buyers Faisal Durrani, head of research Mena, Knight Frank 'This is an exceptionally positive move and will facilitate greater international investment in the real estate market, while ensuring that Saudi nationals aspiring to own a home are not necessarily competing directly with global buyers.' What hurdles are investors likely to face? The biggest hurdle would be the residency issue, but the kingdom is expected to ease the golden visa programme and other ways to attract talent and people, says Mr Ansari from Kamco Invest. 'Even the UAE opened its market very gradually. We believe the UAE's experience would also play a key role in drafting future residency rules,' he reckons. The executive regulations defining ownership procedures, eligibility and restrictions are still pending in the kingdom. 'It is highly likely that the Real Estate General Authority regulations will include updated terms and fees related to acquiring the new property title, and that some of the historical taxations may be amended to encourage foreign investors to enter the market,' CBRE's Mr Green says. 'However, preparations have already begun, with REGA now working to finalise the finer details of the law, including clarification on the designated areas, related restrictions, refinement of the registration process, and related fees.' However, the Saudi real estate market is still maturing, and processes may not be as streamlined as in neighbouring countries, according to Knight Frank. Will foreign ownership make house prices more unaffordable? The decision to allow international buyers access to real estate markets in the kingdom in specific investment zones is likely to be confined to the major giga projects, which will have the impact of creating a two-tiered market – one for international buyers and one for domestic buyers, says Harmen de Jong, regional partner – head of consulting at Knight Frank. As a result, prices within giga projects are likely to accelerate faster than the rest of the more mainstream market, he estimates. The acceleration of house prices in Saudi Arabia over the past five years has been 'exceptional', with prices for apartments in Riyadh, for instance, up by nearly 82 per cent since 2019. However, salaries have not risen by a commensurate level and affordability challenges have begun to emerge, according to Knight Frank. Mr Ansari from Kamco Invest also expects property supply to 'increase gradually' as regional and international real estate companies boost their presence in the kingdom, similar to the gradual growth recorded in the UAE and other GCC countries that opened their real estate sector. Is property tax levied in Saudi Arabia? Historically, Saudi Arabia has not imposed property taxes in the same way as some other countries, but this may change with the new regulations, according to Mr Hussain from Knight Frank. Detailed provisions regarding legal protections, rights of inheritance and dispute resolution mechanisms are not yet available. More clarity will come with the release of executive regulations, he adds. Saudi Arabia levies a 5 per cent real estate transaction tax, which is applied to the ownership transfer of an asset based on the property's sale value. This is normally paid by the seller in advance, CBRE's Mr Green says. However, there are multiple exceptions, such as for inheritance, when the transfer is to a first degree relative. Similarly for other government and special interest cases, the tax is sometimes exempted. 'There is also 15 per cent VAT, which is sometimes applied to the sale and lease of commercial properties (including office, retail and industrial properties), but residential properties are exempted,' he says. 'Other fees are also applied, including title deed registration, service connection fees, permitting fees, etc. 'Finally, there is a capital gains tax that can be applied on the sale of a business asset (real estate, shares, etc.) if it is traded for a profit over and above the original purchase value. The application of this tax can vary, with a 2.5 per cent zakat or 20 per cent tax on ordinary income. However, the CGT is not currently being applied to an individual buying or selling property.'
Middle East Eye
14 hours ago
- Middle East Eye
Fascism and impunity behind Israel and India's latest economic agreement, experts say
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"This move ensures that both countries will immensely profit off of the growth of their own fascist ideologies. This is terrifying," the activist, who asked to remain anonymous over fear of reprisals, said. New MEE newsletter: Jerusalem Dispatch Sign up to get the latest insights and analysis on Israel-Palestine, alongside Turkey Unpacked and other MEE newsletters Speaking at the announcement of the potential IPA deal on Tuesday, Israeli Finance Minister Bezalel Smotrich described the deepening economic ties as one of the "goals" he had set out to achieve as minister, a move observers note has been met with committed reciprocity from Delhi. "Deepening economic ties with India is one of the goals I have set," Smotrich said, before describing India as a "true friend of Israel". Abdulla Moaswes, a Palestinian writer and academic based in the UK, told MEE that the Indian government deliberately used burgeoning economic ties with Israel to project "diplomatic victories to its voter base, amongst whom support for Israel is a popular sentiment". Moaswes said the support for Israel was driven by the Indian ruling party, the BJP's, fascination with Zionism, adding that New Delhi had correctly presumed that continued support for Israel would serve it far more with its constituency than condemning the ongoing war in Gaza, which scholars and international rights bodies have labelled a genocide. 'We demand the Indian government... join the international community to hold the Netanyahu government accountable' - Meera Sanghamitra, NAPM Under Narendra Modi, India has been inching ever closer to a Hindu Rashtra, or a Hindu State, in which Hindus enjoy supremacy over other groups. Muslims and Christians are the focus of attacks and are made to feel as if they are second-class citizens. Meanwhile, large portions of civil society have been dismantled, with dissenting voices in the media repeatedly targeted. Meera Sanghamitra, a national convenor for the National Alliance of People's Movements (NAPM), told MEE that India's deepening relationship with Israel was especially "shameful" given Delhi's decision to abstain from a United Nations-backed resolution last month that called for an immediate ceasefire in Gaza. "Beyond the shameful vote abstention at the UNGA [in June 2025], the current regime's moves to deepen diplomatic and business ties with a genocidal nation is morally reprehensible," Sanghamitra said. "We demand the Indian government not to clinch the investment protection agreement with Israel and instead join the international community to hold the Netanyahu government accountable for all its war crimes," she added. Israel's economy reels The timing of the IPA announcement comes as Israel's economy continues to reel following its government's decision to launch multiple wars across the Middle East. Earlier this year, Israel's government decided to increase military spending by 21 percent from the previous year, despite the economy growing by just 0.9 percent in 2024. Investors appear to have been spooked by the exorbitant government spending, and the temporary suspension of shipping behemoth Maersk's operations at Haifa Port also hasn't helped. The halting of operations struck at the heart of Israel's logistics and supply chain sector. Adani Ports and Special Economic Zone Ltd, for instance, controls the majority stake at Haifa Port, and is part of the larger India-Middle East-Europe Economic Corridor, which remains of strategic importance to both countries. An Indian builder works at a construction site in the Israeli coastal city of Tel Aviv, on 15 December 2024 (Menahem Kahana/AFP) Whilst India has projected itself as pro-Palestine for several decades, Delhi has long had secret military relations with Israel, importing weapons into India since the early 1960s. India officially normalised ties with Israel in 1992, with military relations soon emerging as the bedrock of the relationship. Outside the diamond trade, economic relations between the two countries are estimated at around $4.7bn annually, with India now projected as Israel's sixth-largest trading partner. About one-third of the trade between the two countries is said to be in business services. Crucially, India is also the largest importer of Israeli weapons and therefore an important sustainer of Israel's military-industrial complex. Over the past seven years, Delhi has also looked to co-produce Israeli weapons in India itself. Moaswes said that India's continued support for Israel should be read as an effort to further entrench its own policies in Indian-controlled Kashmir, as well as over Indian Muslims. "To this end, India's courting of more Israeli investment by signing an investment protection agreement on top of the policies of the BJP's flagship 'Make in India' campaign should be understood as a continuation of the process of building mutual reliance between the two states," Moaswes said. For nearly two years, activists in India have been calling on India to alter its relationship with Israel, after it was discovered that Delhi had sent combat drones as well as an AI weapons system in aid of the war effort. Union leaders also urged the Indian government to drop a plan to send thousands of Indian workers to replace Palestinians in Israel's construction industry. But Delhi has shown no indication of bending to demands, describing arms contracts with Israel to be in "the national interest". Meanwhile, economic ties between the two countries have continued to rise. In February, Israel's economy minister, Nir Barkat, visited India with a high-level Israeli business delegation, including Israeli enterprises and representatives from the technology, manufacturing, healthcare, agri-tech, food processing, defence, homeland security, water management, logistics, and retail sectors. In a statement issued before the meeting, the Indian government said both countries held a "shared commitment to technological advancement, innovation, and entrepreneurship makes them natural economic allies". Over the past few months, several Israeli think tanks have been browbeating what they call Israel's move to the east, as fractures with western publics continue to broaden. With university students in western capitals calling for a boycott of Israeli institutions, Israeli universities have leaned into new partnerships with Indian universities in an effort to diversify partnerships and Indian expertise in information technology and engineering. Concomitant to its financial deals, the Indian government has also looked to crush rising dissent over its pro-Israeli policies. In June, demonstrators in Delhi were beaten by Indian police as they looked to protest against Israel's attack on the Freedom Flotilla, featuring several prominent activists, including Greta Thunberg. "It has violently suppressed pro-Palestine protest and speech and has continued to espouse a discourse suggesting that India, the US, and Israel are fighting three fronts of the same war against a global or transnational Muslim enemy," Moaswes said. India's burgeoning ties with Israel were brought into the spotlight during Delhi's war with Pakistan in May, with India turning to Israeli combat drones during the conflict. "For those of us who care about this, we must treat the India-Israel alliance as the natural next step in the consolidation of ethno-nationalist military states worldwide, and commit to taking our struggle beyond borders," the Indian-American activist said. "As an enormous weapons trade partner of Israel, India has made it clear that any foreign policy coming out of Delhi reflects a vested interest in the global military-industrial complex," the activist added.
The National
15 hours ago
- The National
Microsoft's president says UAE AI partnership will advance Middle East prosperity
Microsoft's recent AI investments and partnerships in the UAE have the potential to bolster economies throughout the Middle East, the company's president has said. Brad Smith, who also serves as vice chairman of the Redmond, Washington-based technology giant, also said that various US endeavours with the UAE can help to bring technology to other parts of the world. "I believe and hope it will be a beginning that, you know, will advance economic development and prosperity and societal good in the Middle East itself, in places like the UAE, and Saudi Arabia, and Qatar, and the like," he said on Wednesday during an interview with the Centre for Strategic and International Studies (CSIS) in Washington. Over the past decade, the UAE − the Arab world's second largest economy − has sought be a leader in the AI sector as it diversifies its economy away from oil. Microsoft has been helping to support the country's AI aspirations in recent years. The company made a $1.5 billion investment in UAE AI and cloud company G42 in 2024, and later announced that it would open its research-based AI for Good Lab in Abu Dhabi. Mr Smith's comments about Microsoft's projects and programmes in the UAE come several weeks after he told Congress that the US should try to emulate the UAE's AI strategy. He praised Abu Dhabi's Tamm government services AI assistant, which acts as a one-stop-shop for government services including transport, health care, housing and police services. "We need to bring it to America," he told a US Senate commerce, science and transport committee hearing, referring to the need for apps that simplify the process of renewing driver licences, obtaining various forms and other services. During his interview with CSIS, Mr Smith also spoke in greater detail about Microsoft's investment and partnership with UAE's G42. He said the "financial and technological" relationship between the two companies had the potential to pay altruistic dividends around the world. "How do you take AI, which requires electricity, and bring it to countries and to people that don't even have electricity?" he said. "One is a financial and technology partnership, like what we are advancing between the US and the UAE, Microsoft and G42, so that G42 can build out datacenter infrastructure in Africa." During the interview, Mr Smith also addressed the increasingly controversial topic of export controls. "The US has the opportunity to become the world's leading exporter of not just digital technology services, but AI services in the future," he said. Over the last year, Microsoft has been a vocal critic of US export control policies which seek to prevent US AI technology from potentially being used by countries it views as adversarial, like China. Caught in the middle, however, were countries like the UAE, which were disproportionately affected by certain rules that would have limited their ability to obtain the chips required to fulfil their AI goals. In February, Mr Smith said the export rules, created under former president Joe Biden, would cause ally countries to "worry that an insufficient supply of critical American AI technology will restrict their opportunities for economic growth". A recent deal between the UAE and US, called the US-UAE AI Acceleration Partnership, largely alleviated many of those concerns, providing the UAE with a path to obtain the powerful chips. President Donald Trump's administration said that security guarantees within the partnership aiming to prevent diversion of US technology into the wrong hands played a crucial role in making the deal possible. While speaking at CSIS, Mr Smith also briefly touched upon the AI Acceleration Partnership, as well as Microsoft's investment with G42 which preceded it. "Let's do a better job of packaging ourselves," he said, talking about the importance of boasting the benefits of partnerships between companies and countries. "That's in effect what Microsoft and G42 in the US and UAE have started to do, let's continue to move in that direction."
