Saudi property: UAE, Gulf developers to enter booming market after new ownership law

Dubai: Saudi Arabia’s throwing down the red carpet to foreign investors in its property market – and that’s also going to be an incentive for developers from the UAE and other Gulf states to get into the Kingdom as well. Top-tier names such as Emaar and Damac are already well-represented in the Kingdom.

According to property sources, this year’s launch of - and response to – a Trump Tower in Jeddah (just ahead of a Trump-branded skyscraper launch in Dubai) has shown the level of interest among foreign investors.

Three big developments have thrown the 'spotlight' on Saudi property this year - Trump Tower Jeddah, Saudi Arabia hiking the 'White Land Tax' to 10%, and, now, passing the law for foreign investors to acquire real estate.

“Saudi Arabia is now a bona fide investment destination, and not just for domestic and GCC investors,” said a developer source. “The Trump Tower launch proved that.” (Dar Global is the builder of the project.)  

More developers are queueing up, including, possibly, one of the ‘biggest real estate names in the UAE’.

This week that Saudi Arabia passed the laws that allowed foreigners to acquire property in the Kingdom.

This is the second big real estate sector focused initiative passed this year – earlier, the Saudi authorities raised the ‘White Land Tax’ to 10% from 2.5%. What this means is that owners of non-developed land in urban jurisdictions of Saudi Arabia will have pay a 10% levy on the value. Looking at it in another way, this is an incentive for these land owners to release those holdings for development.

Because such is demand for new housing in the Kingdom, and at growth rates unlikely to see much of a slowdown even in market cycles.

"Saudi Arabia's increase in White Land Tax to 10% reflects a bold policy approach to addressing the Kingdom's housing challenges," said Naveen Sharma, Chairman of Taxation Society - UAE Chapter.

"By raising the cost of holding undeveloped land, the government aims to stimulate construction activity, increase housing supply, and - ultimately - improve affordability in the market. Early indicators suggest the tax will accelerate development activities and help rationalize land value."

The demand is showing up in land prices.

“In Riyadh, prime development zones like King Abdullah Financial District (KAFD) and New Murabba are commanding land prices upwards of SR6,000-SR8,000 per square meter (approximately Dh585–Dh780 per square feet),” said Saad Hussain, CEO of Dubai-based Alaia Developments.

“Strategic residential plots in Diriyah and Wadi Safar are trading closer to SR4,000–SR5,500 per square meter (Dh390–Dh530 per square feet), with continued upward pressure as infrastructure accelerates.”

Head over to the Red Sea corridor, near Amaala and The Red Sea Project, ‘land parcels with resort zoning have seen valuations rise by over 40% in the last 18 months, with beachfront plots now reaching SR3,500–SR4,500 per square meter (Dh340–Dh440 a square foot),” said Hussain.

“Land values in Saudi Arabia - particularly in strategic urban areas such as Riyadh, Jeddah, and regions surrounding giga projects like Neom and Diriya - are experiencing significant upward pressure. That’s a result of rising foreign developer interest and Saudi Vision 2030 driven urban transformation.”

"It will attract foreign investment, boost market activity, and drive demand for premium properties in cities like Riyadh and Jeddah. This move not only aligns Saudi Arabia with global real estate leaders but makes it more appealing to international investors and professionals.

"The benefits will ripple through construction, finance, and services, creating jobs, fostering innovation, and supporting sustainable urban growth. This is a crucial step that will unlock significant long-term value for both real estate and the wider Saudi economy."

- Richard Paul, Head of Professional Services, Savills Middle East