Saudi Arabia is reportedly in the final stages of drafting new real estate laws that will allow foreigners to purchase property in the kingdom, according to the Saudi Gazette.
Abdullah Alhammad, CEO of the Real Estate General Authority (REGA), said foreigners would be allowed to own real estate of all kinds, including commercial, residential, and agricultural, under regulations. Non-Saudi nationals will be allowed to own property in all parts of the kingdom, including Makkah and Madinah.
Talking about the law, Alhammad said, “The negative effects of foreign ownership of the property were monitored in advance to avoid them, and solutions were developed for all problems and unacceptable practices.”
He also commented that the open property market is subject to supply and demand, pointing out that increased property prices are not ideal for Saudi’s real estate sector.
A recent survey by Knight Frank, in collaboration with YouGov, revealed that demand to purchase a home dropped in 2023 due to increased property prices. Saudi’s properties have seen a steady price growth over the last two years, leading up to Vision 2030; thereby, the price increase is diminishing demand for homes. In 2022, the demand for homes was at 84%. However, it has dropped to 40% this year.
Faisal Durrani, Head of Middle East Research at Knight Frank, commented that the decline in demand was due to the increasing real estate prices. With villa prices rising by 45% to over $1,400 per square meter in the last two years, he noted that the possibility of owning a home had become a hurdle in Riyadh.
“Indeed, the total number of homes sold in Riyadh fell by 34% last year, while in Jeddah, there has been a fall of 16%,” he added.