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Over the past six months, the Saudi real estate sector has been shaped by a series of new regulatory announcements, setting the stage for the internationalization of what was previously a restricted local market. This evolving landscape reveals a coordinated ecosystem designed to transform º£½ÇÖ±²¥â€™s most valued asset class from a haven for speculative investments into a dynamic platform for economic growth. 

Focusing on Riyadh, the market’s rapid expansion across all segments is beginning to challenge the city’s competitiveness, largely due to rising living costs driven by a significant surge in real estate prices. The 2021-2025 compound annual growth rate for residential rental rates has reached 18 percent, while commercial rates have grown by 12 percent. In some districts of Riyadh, property prices have doubled in less than five years. 

The flow of foreign direct investment into real estate shows a gradual but delicate increase, underscoring the need for thoughtful policy decisions. To ensure sustainable economic growth, policymakers must balance market openness with measures that protect affordability and attract stable FDI, guiding the sector toward long-term resilience and inclusive prosperity. 

Some notable regulatory interventions include the projected increase in white land tax, the forthcoming foreign ownership law set to take effect in January 2026, and the recent issuance of residential asset-backed securities. These regulations act as interlocking cogwheels within the sector’s evolving machinery, each influencing the other through direct and inverse relationships. For example, the increase in white land tax is designed to encourage more efficient land utilization, prompting owners to develop idle plots rather than hold them for speculative gains. 

Meanwhile, the new foreign ownership law is expected to attract fresh international capital, broadening the investor base and injecting liquidity into the market. Following its announcement, inquiries from international investors rose tremendously, underlining its immediate effect. Combined, these developments are expected to drive demand for asset-backed securities, as both domestic and foreign investors seek robust financing tools to support new projects. Together, these measures advance the sophistication of the Saudi real estate sector — not by simply raising prices, but by fostering a more transparent, efficient, and globally integrated market. 

Connecting the dots in a dynamic regulatory environment.

Elias Abou Samra

The swift adoption of new regulations was not a matter of coincidence, but a direct result of close alignment among the nation’s leadership, government ministries, and the private sector. This unified approach enabled policy decisions to move rapidly from conception to implementation, reducing bureaucratic delays and sending clear, coordinated signals to market participants. As a result, developers are quickly recognizing that the regulatory environment is shifting to prioritize long-term resilience over short-term gains. This realization, reinforced through roundtable discussions and targeted incentives, led many developers by the second quarter of 2025 to embrace single-digit, sustainable growth as a healthier alternative to the previous boom-and-bust cycles common in emerging markets. 

Regulatory clarity also fostered tangible improvements in the real estate landscape. For example, the launch of several joint ventures with international logistics firms in 2025 demonstrated a new openness to cross-border partnerships. Developers also responded to increased competition by investing in advanced building technologies, pursuing green certifications, and enhancing customer service standards. Projects such as the Riyadh Sustainable Living Initiative, which integrated renewable energy and smart infrastructure, illustrated this commitment to raising the quality of products and services. 

Positioned within the broader framework of Vision 2030, these market shifts opened new avenues for investment and innovation. The vision’s emphasis on economic diversification catalyzed growth in emerging sectors such as data centers, flexible living accommodations, urban logistics, entertainment, and life sciences. However, these opportunities are accompanied by challenges — navigating talent shortages in specialized segments, managing cross-sector regulatory overlaps, and ensuring infrastructure keeps pace with rapid development. As Vision 2030 continues to unfold, the interplay between regulatory modernization and private sector adaptability will determine how successfully º£½ÇÖ±²¥ transforms its real estate sector into a globally competitive, future-proof asset class. 

Elias Abou Samra is the CEO of Rafal Real Estate Development. He was listed among the Top 100 Developers in the Middle East by Forbes 2025. 
X: @EliasAbouSamra