Saudi Arabia to Allow Foreigner Property Owners in the Kingdom

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In a move that could open a huge new market for international investors, Saudi Arabia is reportedly set to allow foreigners to own land in the kingdom.

The first opening will be King Abdullah Economic City, a project outside Jeddah under development in a joint venture between the Saudi government and Emaar, the Dubai developer.

"This is the first freehold city in Saudi Arabia," Fahd Al-Rasheed, Emaar Economic City's chief executive officer, told Bloomberg. "A lot of people want to invest in the Saudi market and see it as a frontier for real estate investment because of the population explosion here."

The city, one of four economic centers under development, will eventually house more than 2 million people.

In panel discussions I moderated during the recent Cityscape Abu Dhabi conference, Saudi experts emphasized the kingdom's untapped potential. Home to one of the fastest-growing, most robust economies in the Middle East, there is a huge demand for housing in the country, particularly for middle income families. At the same time, rulers are committed to spending more than $400 billion on infrastructure improvements.

But there are still many obstacles to integrating Saudi Arabia into the global property community.

Regulations putting the foreigner purchase regulations into effect will probably be issued within a few months, Al-Rasheed told Bloomberg. The new rules will also cover foreclosures, repossessions and the creation of a land registry -- all sticky issues under Islamic law.

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