Saudi Real Estate Legislation Places Makkah and Madinah at the Center of Global Investment Ambitions

Saudi Arabia’s government approved a package of regulatory reforms in 2025 that took effect in 2026, allowing non-Saudi citizens to own property in Makkah and Madinah for the first time. The move is a cornerstone of Saudi Vision 2030, designed to transform the western region into a global investment hub by diversifying real estate products and attracting international firms. The reforms follow the Saudi Cabinet’s July 2025 decision to update property ownership rules, which analysts predict will increase demand for residential and hospitality units while expanding the investor base. The Capital Market Authority further expanded access in January 2025 by permitting foreigners to invest in Saudi-listed companies holding real estate assets in the two holy cities. This decision targets foreign capital inflows and aims to enhance liquidity in projects tied to Hajj and Umrah, including high-end hotels and residential complexes near the Grand Mosque and Prophet’s Mosque. Crown Prince Mohammed bin Salman launched the King Salman Gateway project in October 2025, a 12-million-square-meter mixed-use development adjacent to the Grand Mosque featuring 50,000 residential units and 16,000 hotel rooms, with ownership open to Muslims worldwide under the new system. In Makkah, the Masar Destination project spans 1.25 million square meters, offering 13,000 housing units across 82 towers, 24,000 hotel rooms in 58 towers, and 19,000 serviced apartments. Madinah’s Rua Al Madinah project covers 1.35 million square meters, with 80,000 hotel rooms and nearly 500 residential units, currently 65% complete under the Public Investment Fund’s subsidiary, Rua Al Madinah Holding Company. These developments coincide with infrastructure upgrades, including expanded pilgrim capacity at the Grand Mosque, modernized transport networks, and regulated urban growth in the holy sites. The regulatory changes and mega-projects have already driven up land values near the Grand Mosque and increased demand for hospitality services. Last week, Al Rajhi Capital and Thakher Development signed a memorandum of understanding to establish a $534.6 million real estate investment fund in Makkah’s Thakher project, further signaling the sector’s growth. The combined effect of these reforms and infrastructure investments positions Makkah and Madinah as central to Saudi Arabia’s ambition to attract global real estate capital while supporting its pilgrimage economy.