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Five Benefits of the New Foreign Property Ownership Law in Saudi Arabia

A general view of Riyadh, Saudi Arabia. (Asharq Al-Awsat)
A general view of Riyadh, Saudi Arabia. (Asharq Al-Awsat)
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Five Benefits of the New Foreign Property Ownership Law in Saudi Arabia

A general view of Riyadh, Saudi Arabia. (Asharq Al-Awsat)
A general view of Riyadh, Saudi Arabia. (Asharq Al-Awsat)

A newly updated property ownership law approved by Saudi Arabia’s cabinet earlier this month is expected to deliver five major benefits to the Kingdom’s real estate sector, including attracting foreign capital and enhancing transparency, according to industry experts.

Set to take effect in January 2026, the law enables non-Saudis to own property under a regulated framework aimed at modernizing the sector and supporting the country's broader economic transformation goals under Vision 2030.

Real estate experts said the law will draw foreign investment through sovereign wealth funds and international developers, transfer global expertise in property management and development, expand the supply of residential and commercial units, unlock new financing channels for large-scale developments, and generate new job opportunities for Saudi citizens.

“This is a pivotal step toward creating a more transparent, professional, and investor-friendly real estate market,” said Khaled Al-Mobid, CEO of property firm Manassat.

“The new system regulates relationships between all market players, speeds up processes, protects rights, and raises the overall quality and diversity of real estate projects,” he told Asharq Al-Awsat.

He said the streamlined regulations are expected to make the Saudi property market more appealing to both local and international investors, particularly with improved governance and legal clarity. The law is also anticipated to support price stability by reducing speculation and ensuring more equitable property valuations.

With a more welcoming investment climate, Al-Mobid expects a wave of international developers to enter the market, especially in major cities and emerging economic zones.

“This framework reduces operational risks and facilitates licensing for major projects,” he said.

Ahmed Al-Faqih, a real estate consultant and appraiser, told Asharq Al-Awsat the reform marks a shift in Saudi Arabia’s investment landscape, offering promising returns to global funds and real estate entities.

He highlighted the law’s potential to attract capital from around the world while transferring expertise in property development, facility management, and project execution to the local market. “It will enrich the supply across all real estate segments, from residential to industrial and tourism-related projects,” Al-Faqih said.

One of the most notable features, he added, is the introduction of internationally recognized financial mechanisms such as profit-sharing structures to fund large-scale developments. These changes are also expected to create thousands of new jobs in the Kingdom’s growing real estate sector.

Al-Faqih pointed to the law’s removal of the residency requirement for foreign ownership as a key draw. “It adds much-needed flexibility and enhances the appeal of Saudi Arabia’s real estate market,” he said, predicting it will boost the sector’s contribution to non-oil GDP and ensure long-term sustainability.

According to the Real Estate General Authority (REGA), the new law will come into force 180 days after its publication in the official gazette. The executive regulations outlining implementation procedures and conditions will be issued within the same period.

Ownership will be permitted in specific areas of Riyadh and Jeddah under a structured geographic framework designed to protect market balance. However, property ownership in Makkah and Madinah will be restricted to Muslims under special conditions or regulated arrangements.

The system permits full ownership, as well as other real rights, such as usufruct and easements, provided the property is recorded in the national real estate registry and all ownership data is fully disclosed as stipulated in the executive regulations.

The Kingdom’s real estate sector has witnessed robust growth in recent years, contributing about 14% to GDP by the end of 2024, according to REGA CEO, Abdullah Al-Hammad.

The updated law, experts say, is expected to further strengthen that trajectory by fostering a more competitive, transparent, and globally integrated market.

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UK Budget Deficit for 2025/26 Narrows to Six-year Low

Skyscrapers in London's financial district (Reuters)
Skyscrapers in London's financial district (Reuters)
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UK Budget Deficit for 2025/26 Narrows to Six-year Low

Skyscrapers in London's financial district (Reuters)
Skyscrapers in London's financial district (Reuters)

Britain's budget deficit for the last financial year narrowed to a six-year low as a percentage of economic output although borrowing for March alone exceeded forecasts, official data showed on Thursday.

The Office for National Statistics reported 132.0 billion pounds ($178.1 billion) of public sector net borrowing in the 2025/26 financial year that ⁠ended in March.

That ⁠was 0.7 billion pounds less than the most recent forecast from the Office for Budget Responsibility and down from 151.9 billion pounds in 2024/25.

Equivalent to 4.3% of ⁠economic output - in line with the OBR prediction - the deficit was the smallest since the 2019/20 financial year, which ended just as the response to the COVID-19 pandemic caused debt to soar.

Debt interest spending in 2025/26 was 97.6 billion pounds, up from 85.4 billion pounds a year ⁠previously ⁠and marking the second-highest figure in cash terms since 2022/23, when inflation soared after Russia's invasion of Ukraine.

Last week, the International Monetary Fund cut Britain's economic growth forecasts for 2026 by more than for any other Group of Seven nation due to the country's exposure to higher energy prices with its heavy use of natural gas.

"A more stagflationary backdrop is forecast to take shape, with speculation already building about the impact of weaker growth on the Chancellor's headroom," Nabil Taleb, economist at PwC UK, said, referring to Reeves' ability to meet her borrowing target.

"Recent moves in bond markets, with gilt yields briefly touching 5% for the first time since 2008 before easing, also highlight the UK's vulnerability to uncertainty."

In March alone, the ONS reported public sector net borrowing of 12.6 billion pounds. Economists polled by Reuters had a median forecast of a 10.3 billion-pound deficit for the month.

Business

Saudi Arabia, Philippines to Join JPMorgan Emerging Market Bond Index in 2027

FILE PHOTO: Signage is seen at the JPMorgan Chase & Co. New York Head Quarters in Manhattan, New York City, US, June 30, 2022. REUTERS/Andrew Kelly/File Photo
FILE PHOTO: Signage is seen at the JPMorgan Chase & Co. New York Head Quarters in Manhattan, New York City, US, June 30, 2022. REUTERS/Andrew Kelly/File Photo
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Saudi Arabia, Philippines to Join JPMorgan Emerging Market Bond Index in 2027

FILE PHOTO: Signage is seen at the JPMorgan Chase & Co. New York Head Quarters in Manhattan, New York City, US, June 30, 2022. REUTERS/Andrew Kelly/File Photo
FILE PHOTO: Signage is seen at the JPMorgan Chase & Co. New York Head Quarters in Manhattan, New York City, US, June 30, 2022. REUTERS/Andrew Kelly/File Photo

J.P. Morgan said on Wednesday that Saudi Arabia and the Philippines will be added to its local currency emerging market debt index from January 29 next year.

The inclusion will cover Saudi riyal-denominated sovereign sukuk and Philippine peso-denominated government bonds, both entering the widely tracked GBI-EM ⁠index series.

Their weights ⁠will be introduced gradually, with Saudi Arabia expected to reach 2.52% and the Philippines 1.78% once fully phased in.

The update is part ⁠of a broader index adjustment, which will lower the "Country Cap" - the maximum weight, or share, any single country can hold in the "diversified" index - to 9% from 10%.

As a result, major markets including China, India, Mexico, Malaysia, and Indonesia will see their ⁠weight ⁠reduced to the new limit.

Based on current eligibility criteria, about eight Saudi sovereign sukuk with a combined value of roughly $69 billion could be included, JPMorgan said.

For the Philippines, nine eligible government bonds with a combined value of around $49 billion are under consideration.

Business

Oil to Fabric: Middle East Crises Reshape Global Fashion

A worker arranges spools of thread at a textile factory in Haiyan, Jiangsu province, China (Reuters)
A worker arranges spools of thread at a textile factory in Haiyan, Jiangsu province, China (Reuters)
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Oil to Fabric: Middle East Crises Reshape Global Fashion

A worker arranges spools of thread at a textile factory in Haiyan, Jiangsu province, China (Reuters)
A worker arranges spools of thread at a textile factory in Haiyan, Jiangsu province, China (Reuters)

Rising oil prices are no longer just an energy market story; they are feeding directly into the cost of clothing. From petrochemical plants to fabric mills and retail racks, a complex supply chain is passing on higher costs, pushing up the final price consumers pay.

According to the “Materials Market 2025” report by the Organization for Textile Exchange, polyester makes up about 59% of global fabric output, with roughly 88% produced from non-recycled petroleum sources, leaving the industry exposed to energy price swings.

Oil prices have surged about 32% since the start of the US-Israeli war on Iran on Feb. 28, approaching $100 per barrel.

Fabrics under oil pressure

Amal Saqr, a textile design consultant, said the sector is highly sensitive to shifts in oil prices because of its reliance on synthetic fibers.

More than 60% of fabrics used in global clothing production depend on petroleum-based materials such as polyester, nylon and acrylic, she said, adding that any rise in oil prices feeds directly into fabric costs.

She pointed to 2008, when polyester prices jumped about 30% within three months as oil hit record highs, forcing Asian spinning mills to cut output by 20% to 25%.

Disruptions in the Red Sea between 2023 and 2024 also drove shipping costs up by about 300%, raising raw material costs and straining supply chains.

Yemen’s Iran-aligned Houthis began targeting ships linked to Israel on Nov. 19, 2023, using drones and missiles.

Natural fabrics not immune

Natural fibers such as cotton and linen avoid direct reliance on oil, but are still exposed to energy costs, Saqr said, noting that farming depends on fertilizers, fuel and transport.

The global fertilizer crisis in 2021 pushed prices up about 80%, driving cotton prices higher by roughly 40%. Later disruptions in the Strait of Hormuz added another 40% increase in fertilizer costs due to shipping delays.

Global cotton production reached about 24.5 million tons in 2024, or roughly 19% of total fiber output, making it less dominant than synthetic fibers but relatively more stable in pricing, according to the Textile Exchange report.

Rising production costs

Higher energy prices are hitting every stage of production, from spinning to dyeing and drying, Saqr said.

With already thin margins, textile factories face a stark choice: raise prices or cut output, both of which ultimately hit consumers.

World Bank data shows operating costs for textile factories in several countries have risen by about 18% following recent energy price increases.

Import markets feel it fast

Import-dependent markets are quick to absorb shocks from shipping or energy disruptions, Saqr said.

Shipping costs from Asia have lifted synthetic fabric prices by 10% to 18%, while imported cotton prices have climbed by 15% to 25%.

Rerouting shipments from the Strait of Hormuz to the Cape of Good Hope has added 10 to 14 days to transit times, leading to shortages and swings in the availability of fabrics and garments.

Value chains under rethink

Burak Cakmak, chief executive of the Saudi Fashion Commission, said the impact of oil prices is not immediate, as final pricing reflects a full value chain including production, marketing and distribution.

Instead of passing costs on, many brands are rethinking how to create value, improving efficiency and working more closely with suppliers, he said.

He also pointed to a shift toward localized production, with brands operating closer to their markets and managing inventory more tightly to control costs and improve flexibility.

Sustainability gains urgency

Sustainability is no longer just an environmental concern; it is tied to efficiency and long-term economic viability, Cakmak said.

The sector is moving toward circular models, including recycling and waste reduction, practices that are becoming essential to improving operations.

Designers double down

Anna Zinola, director of Istituto Marangoni in Riyadh, said rising oil prices are reinforcing, not reshaping, designers’ shift toward more conscious material choices.

Sustainability is embedded in the curriculum as a core approach guiding every design decision, she said.

Students are trained to balance cost, sustainability and consumer demand, while exploring material innovations that combine environmental and commercial goals.

Prices set to rise

Reports by McKinsey and Euratex expect global clothing prices to rise by 8% to 12% over the next year, as supply chain pressure persists and shipping costs remain elevated.