Revolution in real estate law: Foreigners can invest in Makkah and Medina!

Revolution in real estate law: Foreigners can invest in Makkah and Medina!

Makkah, Saudi-Arabien - On July 15, 2025, Majed bin Abdullah al-Hogail, the Saudi Minister for Parish and Housing, King Salman and the Crown Prince for the approval of an updated regulation. This regulation concerns the property ownership of non-Saudis and was decided during a ministerial council meeting on July 8, 2025. The aim of the new regulation is to advance the reforms in the real estate law to develop the sector and to promote foreign direct investments. According to OTS should help the regulation to increase the range of real estate and to attract more investors to the Saudi market.

The updated regulation allows real estate ownership under certain conditions in the sacred cities of Makkah and Madinah. The regulations apply to both natural and legal persons, whereby the Real Estate General Authority (Rega) is responsible for determining the geographical areas in which foreigners can acquire real estate. The concrete implementation provisions are made available on the platform for public consultations (Istitlaa) within 180 days of publication, and the regulation is expected to come into force in January 2026

increasing demand and new laws

Saudi Arabia is increasingly becoming an attractive goal for expatriates and foreign investors who want to invest in real estate. The number of expatriates in the country has increased from 200,000 to over 1.2 million. This has led to an increasing demand for real estate, which in turn leads to more complex regulations for foreign investments, such as Aparthotel.com reported.

Foreigners can acquire real estate in certain areas, including “integrated tourist destinations”, have to have a residence permit (IQAMA) and invest at least 30 million riyal in a project. The purchase of land is not permitted for non-Saudis, especially in the holy cities. The Saudi government plans to further loosen the property laws for foreigners to increase investments.

market analysis and developments

The Saudi real estate market shows strong growth, with a forecast market size of $ 69.51 billion for 2024 and 101.62 billion USD until 2029. href = "https://www.mordorintelligence.com/de/indery-deports/saudi-arabia-real-estate-market" Class = "Source_3"> Mordor Intelligence specified.

The urbanized population in cities such as Riad and Dschidda promotes the demand for living and commercial properties, while at the same time the rental prices for office space in Riad have risen. Despite these positive developments, foreign buyers face challenges, including fluctuating real estate prices and bureaucratic hurdles. A favorable tax environment and potential capital returns of up to 25 % per year make investments attractive.