Most Saudi nationals living in Riyadh don’t own their own home. According to the Population Statistic Center at King Saud University (KSU), 52 percent of nationals in Riyadh alone rent property instead of buying property in Saudi Arabia.

Across the country, these figures are less staggering; 60 percent of Saudi nationals own their homes, 35 percent rent houses and five percent live in accommodation provided by their employers.

Why are Saudis still renting?

Lack of housing supply is one reason why the number of Saudi home-owners is low. There is a high demand for housing, and not enough supply, driving prices too high for some to afford buying property in Saudi Arabia.

To meet needs, the Saudi government is injecting money into the real estate sector and constructing more units in order to reduce the shortages of homes. Backed by state funds of SR 250 billion, government schemes aim to build 500,000 new homes over the next couple of years.

New mortgage laws offering flexible loans are also encouraging Saudi nationals to invest into the real estate market, consider home finance as a good option, and buy property.

Can I buy property as an expat?

Expats can own property for either business or residency purposes, but buying property in Saudi Arabia is subject to approval by authorities. Foreign ownership in the two holy cities of Mecca and Medina is forbidden altogether.

Expats can also own land for construction – but, again, prior approval and correct licensing will be required from authorities. Currently, expats need to meet requirements such as approval from the Ministry of Interior,  a good financial history, and the correct profession listed on their residency permit. For example, expats who have their profession listed as foreign investor on their residency permit are eligible to own property in Saudi Arabia.

Usually the purchase of private land is negotiated between the buyer, seller and a mediator such as a lawyer or a land broker. Once an agreement is reached, the Sharia Court needs to confirm if the transaction is approved and transfer the ownership.

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Should I buy or rent?

With new mortgage laws, the Saudi government increasing housing supply, and no taxation, buying property in Saudi Arabia is increasingly becoming an attractive option.

Here are a few factors to help you decide if you should buy or rent:

  • Preference: Do you want the flexibility of renting a home or do you prefer the stability of owning your own home?
  • Costs involved with owning property: How do you plan to pay for your property? If you are taking out a mortgage consider processing fees, early settlement fees, down payments, and flat and reducing interest rates. Other costs to factor in are the maintenance of the property and buildings insurance.
  • Duration: If you are an expat, how long do you plan to stay in Saudi Arabia? Short-term stays for just a few years might not be worth the effort, time and cost of buying.
  • Approval: Expats need to get approval from the relevant authorities such as the Ministry of Interior, and meet certain criteria, such as showing proof of a good financial history. Do you fulfill such requirements of a homeowner in Saudi Arabia?
  • Compare: Research mortgages offered by banks in the market and find out what your financing options are for buying property in Saudi Arabia. Based on your research, evaluate the more practical option for you of either renting or buying.