Real estate rules tighten market controls, curb speculation: Experts

A view of Riyadh skyline

Regulatory authorities in Saudi Arabia are continuing to restructure the real estate market through a series of measures aimed at controlling prices and limiting speculation, most notably regulating non-Saudi property ownership, implementing White Land fees, and launching the Real Estate Balance Platform (Tawazoun).

Experts told Argaam that the recent regulatory decisions in the Kingdom’s real estate market — particularly the regulation of non-Saudi ownership — mark a pivotal step toward restoring market balance. These measures are expected to protect citizens' purchasing power, stimulate real housing demand, and enhance the efficiency of real estate supply in the coming phase.

Boosting Supply and Reducing Prices

Muteeb Alsulaimani, CEO of Ibrahim Bin Saedan Investment Co.

Muteeb Alsulaimani, CEO of Ibrahim Bin Saedan Investment Co., said implementing White Land fees provides a direct incentive to the real estate sector in two ways.

First, it helps reduce prices by increasing the supply of land for sale, allowing developers to establish and develop real estate funds at both infrastructure and superstructure levels.

Second, it stimulates development, as many landowners are partnering with real estate developers to develop their land.

In both cases, this expands options available to beneficiaries — whether land plots or housing units — helping steer the real estate market back onto the right path, Alsulaimani said.

Economic consultant Ahmed Alshehri

Economic consultant Ahmed Alshehri noted that White Land fees serve as a pressure tool to reduce the opportunity cost of holding land, thereby increasing the supply of both land and developed units.

This transforms real estate from a store of value into a productive asset, curbs price hoarding, and corrects distortions between market prices and fair value based on citizens’ income levels.

He explained that, as widely recognized in economics, when fees exceed the annual growth rate of land prices, owners are forced to choose between rapid liquidation, thereby increasing supply or capital development to maximize returns.

This restores balance to the supply-demand curve and reduces real estate inflation, Alshehri said.

Tawazoun Platform and Curbing Speculation

Alsulaimani highlighted that the Tawazoun Platform was launched to enable beneficiaries and prospective homeowners to obtain land at fair prices, especially since the included plots are located in city centers and areas where prices clearly exceed the announced price ceiling.

He noted that the platform is expected to curb speculation by directing genuine demand toward it and allowing citizens to own property at fair prices, away from inflated valuations.

Alshehri added that the platform serves as a price benchmark that breaks monopolistic practices and encourages the private sector to adopt pricing models based on balanced operational and investment costs rather than speculative value.

Economically, this protects the market from real estate credit bubbles and redirects liquidity toward other productive sectors.

Once speculators recognize the existence of a price ceiling, the incentive to inflate prices diminishes, allowing genuine housing demand to drive the market, Alshehri said.

Implications for Real Estate Investment Attractiveness

Alsulaimani pointed out that real estate investment in the Kingdom offers a strong, attractive environment for both domestic and foreign investors.

He emphasized that these decisions primarily aim to enable citizens to own homes, particularly as the homeownership rate has now reached about 65%.

Real estate demand is growing annually, driven by a youthful population, with young men and women accounting for around 75% of residents.

He expects a clear shift in demand volumes once foreign investors are allowed to own property starting in early 2026, which will require accelerating the pace of real estate development to meet this demand.

Alsulaimani referred to the growing number of local and global alliances to develop urban projects and integrated smart cities, as highlighted at the recent Cityscape real estate exhibition.

Regulating Foreign Ownership and Protecting the Market

Regarding the regulation of non-Saudi ownership, Alsulaimani said the governing laws aim to avoid negatively affecting citizens seeking housing by imposing conditions and minimum value thresholds for ownership — whether for holders of premium residency or resident workers in the Kingdom.

He emphasized that additional fees on real estate transactions, along with a minimum holding period before resale for foreign owners, act as safety measures to curb rapid speculation and prevent poorly studied demand.

He stressed that the Saudi real estate market has unique characteristics compared to regional markets, driven by demand size and sustainability, and is not a seasonal market.

Alshehri said that the fees imposed on foreign investors serve as a filter, selecting quality investors rather than transient speculators.

This protects the local market from volatility driven by hot money flows, maintains price stability, prevents the importation of external inflation into the Saudi real estate market, and ensures that foreign investors contribute to public revenues to cover infrastructure costs.

He added that these fees can be classified under macroprudential economic policies, which have proven globally to reduce price volatility and make real estate less vulnerable to external shocks, thereby enhancing genuine competitiveness based on market stability.

Zoning and Protecting Residential Neighborhoods

Alsulaimani explained that the foreign ownership system sets clear limits on the number of properties that can be owned, reducing the impact of external demand on middle-income neighborhoods.

He emphasized that defining ownership zones helps protect citizens’ purchasing power, maintain market balance, and ensure real estate development free from price distortions.

Alshehri clarified that the zoning system serves as a geographic and economic safety valve separating subsidized social housing from the international real estate investment market.

Economically, it prevents spatial socioeconomic segregation that could displace citizens from their neighborhoods due to rising prices driven by competition from foreign liquidity.

He noted that foreign investment is directed toward specific areas that create high-value investment clusters — particularly commercial and tourism-oriented zones — while preserving price flexibility in other areas.

This ensures balanced purchasing power and protects the social and economic stability of the middle class, Alshehri concluded.