Dubai’s real estate market closed 2025 with another record-breaking performance, but some global investor attention may shift to Saudi Arabia this year.
The kingdom has spent the past several months overhauling its property market. Officials imposed an unprecedented five-year rent freeze in Riyadh and quadrupled taxes on undeveloped land, measures aimed at pushing owners to build. The most significant change arrives this month, when new rules will allow foreigners to own property in the kingdom.
Once the law takes effect, non-Saudis will be able to buy residential, commercial, agricultural and industrial property in designated zones across Riyadh, Jeddah, and the holy cities of Mecca and Madinah.
It’s a long-anticipated step that developers hope will draw buyers and international investors to a market that remained largely off-limits to foreigners for decades.
The law is also expected to breathe new life into Saudi projects that the government started but may struggle to finance on its own, such as Diriyah and Qiddiya, which are near population centers and likely to see quicker returns. Foreign developers, suppliers and contractors will be able to enter the market through joint ventures with local firms on a more even footing once the law comes into force, experts say.
Yet even as the country draws more overseas capital, it will need to ensure sufficient housing supply so local Saudis aren’t priced out.
Saudi Arabia’s push comes as Dubai continues to set the standard for regional property markets.
The emirate delivered another strong year for investors in 2025, extending the longest real-estate rally in its history despite warnings about oversupply and bubble risk.
The value of property transactions rose 20% from 2024 to 917 billion dirhams ($250 billion), government data show.
At the top end of the market, demand continued to surge. About 500 homes sold for more than $10 million, according to Knight Frank, including a record 68 transactions above $25 million. Total deal value in this segment rose nearly 28% to $9.05 billion.
Meanwhile, off-plan sales accounted for 76% of all residential transactions, according to ValuStrat, a segment that has increasingly attracted ultra-wealthy buyers and sparked bidding wars. Overseas investors and residents opting to swap high rents for mortgage payments have helped fuel demand, said Haider Tuaima, who heads real estate research at ValuStrat.
Still, a wave of new supply — which had prompted Fitch Ratings to forecast a “moderate correction” heading into 2026 — is beginning to cool rents. “Rental growth has slowed and in some areas stabilized completely,” Tuaima said.
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