After the Regulation and Geographic Zones: How Competition and Project Quality Are Set to Shift in Saudi Arabia's Real-Estate Market

The question of non-Saudi property ownership in the Kingdom is no longer confined to: “Can a non-Saudi buy a property?” Following the Council of Ministers' approval on 23 June 2026 of the executive regulation and the geographic zones, the question that now matters most to the market is: which projects will actually be able to attract the new demand and convert it into sustainable investment?

The approved framework sets out where ownership is permitted, the types of real-estate rights, the permitted ratios, the usufruct durations, and the requirements and procedures. The Real Estate General Authority (REGA) also confirmed that the limited geographic zones were designed to direct real-estate growth and link opportunities to the needs of cities and their capacity to grow, rather than to open ownership uniformly across all locations. (Real Estate General Authority, REGA)

Accordingly, the expected impact lies not only in the entry of new buyers, but in reshaping competition among developers and raising the importance of product quality, clarity of rights, operational efficiency, and a smooth investor journey.

From broadening the buyer base to expanding the size of the market

The new regulation adds categories of investors and buyers to the market within defined controls and zones. This demand, however, is neither general nor open; it is qualified demand that depends on the status of the beneficiary, the location of the property, the type of right, and the fulfilment of regulatory requirements.

The first clear applied example appeared just one day after approval, when Umm Al-Qura Development & Construction Company announced that its Masar Destination project had been designated within the geographic zones in which non-Saudis may own property inside Makkah. The company said it expected this to help broaden the base of investors qualified to benefit from the project's opportunities, while affirming that the financial impact cannot be determined at this time. (Saudi Tadawul)

This wording reveals two important points:

• Designating a project within a permitted zone may broaden the base of potential clients.
• A broader client base does not automatically mean higher sales, prices, or profits; the outcome will remain tied to the project's quality, its price, the type of product, and its ability to meet the needs of the new investors.

Consequently, the project will still need to prove its investment merit, even if its location is regulatorily qualified to receive non-Saudi buyers.

The larger impact may be on market size rather than prices alone

Early discussions about non-Saudi ownership tend to focus on the possibility of rising prices. Recent analyses, however, point to a more balanced scenario.

On 24 June 2026, Asharq Al-Awsat quoted real-estate specialists who expected that the entry of new investment would encourage developers to increase supply and improve the quality of real-estate products. The analysis also noted that the larger impact may appear in the expansion of the market's overall size, rather than in higher prices alone. (Al-Arab Weekly)

The most attractive locations may benefit in the first phase from the entry of new demand, but increased supply and intensifying competition among developers could act as a balancing factor over the medium term. These are analytical forecasts by market specialists, not a guarantee of future price movements. (Al-Arab Weekly)

A professional assessment of the impact must therefore distinguish between:

• A temporary or selective rise in demand for certain locations.
• An expansion in the number of potential buyers.
• The launch of new products and projects.
• Improved competition among developers.
• An increase in the options available to the beneficiary.
• The gradual balance resulting from growth in supply.

Competition shifts from product scarcity to product quality

According to specialists' views published after the regulation's approval, the market may move from a phase in which some projects outperform merely because supply is limited, to a phase in which quality and competitiveness become more influential factors in the investment decision. Projects distinguished by location, services, and design will be better placed to attract demand, while lower-quality products may face greater pressure to preserve their value. (Al-Arab Weekly)

But “project quality” here does not mean only the appearance of the facades or the luxury of the finishes. In the new environment, quality becomes a blend of several elements:

1. Quality of locationIt is not enough for the project to sit in a major city; it must be within a qualified zone and in a location connected to services, infrastructure, and growth opportunities.
2. Quality of productAreas, unit types, level of finishing, prices, and services must align with the needs of the target segments, rather than producing similar units for all buyers.
3. Quality of place experienceThe value of the public realm, walkways, shading, restaurants, daily services, ease of movement, and quality of operation rises. The investor does not assess the unit alone, but assesses the surrounding environment and its ability to sustain attractiveness, occupancy, and value.
4. Quality of rights and documentationThe investor needs a clear understanding of what they own, what rights are attached to the property, how ownership is registered, and what obligations, fees, and disclosures are required.
5. Quality of post-sale operationProperty and facilities management, maintenance, leasing, owner service, and clarity of operating fees all affect the investment decision, especially for the non-resident buyer.

The real-estate project thus becomes an integrated investment and operational product, not merely a building that is sold and after which the developer's relationship with it ends.

Why will not all projects benefit to the same degree?

Designating the geographic zones does not grant every project within the city the same investment value. The benefit will vary according to each project's readiness.

Projects can be divided into three analytical categories:

Qualified and ready projects

These are the projects located within the approved zones, enjoying clear rights, organised registration, a suitable product, good services, and an easy purchase and operation journey.

These projects will be the closest to benefiting early from the new demand.

Qualified but not commercially ready projects

A project may lie within a permitted zone yet suffer from weak design, an excessive price, an absence of services, or ambiguity in operation and management.

Its regulatory benefit does not guarantee its commercial success.

Good projects that are outside the zone or non-compliant

A project may have a good location or design, but the non-applicability of the zone, the type of right, or the required conditions will limit the ability to market it to certain non-Saudi categories.

This means developers will need to conduct a regulatory and commercial assessment together, rather than treating ownership eligibility as a marketing tool separate from the rest of the product's elements.

The real-estate register and transparency are part of a project's value

The Real Estate General Authority clarified that the ownership journey is linked to the “Saudi Real Estate” portal, the real-estate register, electronic payment channels, and disclosure and compliance mechanisms. This system aims to raise the clarity of procedures, enhance transparency, and safeguard the rights of those involved. (Real Estate General Authority, REGA)

For the developer, this means that legal documents and real-estate data are no longer back-office files handled as a sale approaches, but have become part of the product itself.

A project ready to receive an international investor needs:

• Accurate data for the property and the project's plots.
• Clarity of ownerships, rights, and restrictions.
• Defining the unit types and the rights available to each category.
• Clear contracts consistent with the regulations.
• Organised disclosure of fees and obligations.
• Traceable payment mechanisms.
• Professional post-sale management.
• Documents intelligible in the languages of the target investors.

The speed and clarity of completing these procedures may turn into a competitive advantage, especially when projects converge in location and price.

The new demand coincides with pressure to increase supply

The regulation of non-Saudi ownership does not occur in isolation from the rest of the real-estate market reforms. In a report issued by Knight Frank in June 2026, the firm noted that the first full cycle of the amended white-land tax system had begun to affect the behaviour of landowners.

According to the report, the system applies to vacant land exceeding 5,000 square metres within the designated zones, with graduated annual fees ranging from 2.5% to 10% of the land's value depending on location and priority. This mechanism aims to curb speculative holding, accelerate the release of land for development, increase supply, and support housing and urban-growth objectives.

The report holds that the pressure on owners to develop or sell has begun to raise the supply of land and active projects and to increase the competitiveness of the acquisition environment. It also pointed, however, to potential challenges; existing tax obligations may complicate selling, transferring the title deed, or entering the land into a partnership or fund, and may also affect the ability to mortgage it to obtain financing.

These developments lead to a broader market picture:

Demand may widen with the entry of new investors, and at the same time supply may rise as a result of incentivising the development or sale of land.

This coincidence reduces the accuracy of the hypothesis that the entry of non-Saudis will necessarily lead to a general and sustained rise in prices. The outcome will differ by city, zone, property type, and the speed at which new supply enters.

The economic context supports activity, but does not guarantee the performance of every project

On 9 June 2026, the General Authority for Statistics announced that real gross domestic product grew by 3.0% in the first quarter of the year compared with the same quarter of 2025. Oil and non-oil activities each grew by 2.9%, while non-oil activities were the largest contributor to real growth, with a contribution of 1.7 percentage points. (General Authority for Statistics)

Financial, insurance, and business-services activities also recorded the highest growth rate among activities during the first quarter, at 5.4%, followed by manufacturing excluding oil refining at 4.0%. (General Authority for Statistics)

These figures form a supportive economic context for business and investment growth, but they do not automatically mean the success of all real-estate projects. A growing economy creates opportunities, while a project's success remains tied to product quality, location, financing, operation, pricing, and execution.

What does this mean for destination developers and integrated projects?

For destination developers, non-Saudi ownership should not be treated merely as an additional sales channel. It must be embedded in planning, design, financing, and operation decisions from the early stages.

First: mapping eligibility before fixing the product

The following must be determined:

• Is the project within an approved zone?
• What types of rights are available?
• Which categories may own?
• What uses are permitted?
• What restrictions are associated with the location?

It is not advisable to build a financial model that assumes international sales before proving these elements.

Second: segmenting non-Saudi clients

The “non-Saudi buyer” is not a single category. They may be:

• A resident looking for a home.
• A holder of premium residency.
• A non-resident investor.
• A Gulf citizen.
• A company seeking an operating asset.
• An investor focused on rental yield.
• A buyer seeking seasonal residence or a lifestyle.

Each category has different needs in price, area, service, financing, and operation.

Third: developing the product around actual use

Anticipating international demand should not automatically raise the level of luxury and cost. The right product is one that balances:

• Purchasing power.
• Experience quality.
• Development cost.
• Operating fees.
• Expected return.
• Local market requirements.
• The needs of the international buyer.

Fourth: adopting phased development

When the market is in a phase of regulatory transition, phased development is better able to manage risk.

One can begin with a first phase that tests:

• Sales velocity.
• The most interested categories.
• The most in-demand products.
• Price sensitivity.
• Customer acquisition cost.
• Take-up of services and amenities.
• The share of demand that converts into registered transactions.

Later phases are then adjusted based on actual data, not on general expectations.

Fifth: making operation part of the design

The distant buyer needs:

• Property management.
• Professional leasing.
• Reliable maintenance.
• Digital channels.
• Multilingual owner service.
• Clarity of fees.
• Periodic reports.
• An easy mechanism for resale or re-leasing.

The earlier this model is designed, the greater the project's ability to attract investors who do not intend to reside permanently in the Kingdom.

Sixth: preparing an investment data room

The data room should include, according to the nature of the project:

• Land and ownership documents.
• Real-estate registration data.
• Licences and approvals.
• A description of the available rights.
• Unit plans.
• Area schedules.
• Template contracts.
• Fees and taxes.
• The operating model.
• Return forecasts with a statement of their assumptions.
• Risks and restrictions.
• Development and delivery phases.

Organised transparency helps the investor reach a decision and reduces the time required to complete the transaction.

Which indicators should be monitored during the coming period?

The true outcome of the regulation will not appear in the number of enquiries or visits to websites, but in actual data.

Among the most important indicators:

• The number of projects announcing their entry within the approved zones.
• The number of applicants for eligibility.
• The number of transactions registered for non-Saudi buyers.
• The distribution of demand among residential, commercial, and hospitality.
• The most attractive cities and projects.
• The average transaction value.
• The share of enquiries that convert into sales.
• The time taken to complete ownership procedures.
• Growth in supply within the approved zones.
• Changes in prices and rents compared with areas not covered.
• The level of demand for property management and leasing.
• The number of developers launching products aimed at international investors.

Until this data is available over a sufficient time horizon, definitive forecasts about prices or the volume of investment flows must be avoided.

What distinguishes the winning project in the new market?

Based on the published regulatory and market trends, the project most prepared to compete can be described as the one that combines:

• A qualified and clear location.
• Real-estate rights that are comprehensible and documentable.
• A product suited to a defined target segment.
• A design that raises quality of life.
• Services and amenities capable of sustainable operation.
• Prices linked to actual value.
• Disciplined development phases.
• A clear real-estate register and documentation.
• A digital and simplified purchase journey.
• Professional post-sale management.

Relying on location alone, on product scarcity, or on the expectation of rising prices may not be sufficient in a market heading towards increased supply and intensifying competition.

Conclusion

The approval of the executive regulation and the geographic zones represents a regulatory step that goes beyond merely enabling ownership for new categories. It redefines the relationship between real-estate investment, project quality, clarity of rights, and operational efficiency.

In the short term, the most attractive locations and projects may benefit from the entry of new demand. But in the medium term, competition is expected to become more closely tied to product quality, services, design, ease of procedures, and the developer's ability to deliver a clear asset that is operable and able to preserve its value. (Al-Arab Weekly)

The opportunity, then, lies not only in selling more units, but in building more mature projects ready to receive a local or international investor seeking a clear experience, documented rights, a good product, and reliable operation.

Note: this article is a general analytical reading, and does not constitute legal, financial, or investment advice, nor is it a substitute for consulting the official authorities and specialists before taking any decision.

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