Shares of Saudi Arabian real estate companies rose sharply after new rules allowing broader foreign ownership of listed property firms formally took effect, prompting renewed investor interest in the sector.

The regulatory change, implemented by the Saudi Capital Market Authority, enables non-Saudi investors to own stakes in publicly traded real estate companies and real estate investment funds beyond previous limits, aligning property markets with wider capital-market liberalisation.

Traders reported strong buying across major property developers and real estate investment vehicles during the first sessions following the rule change.

The gains were driven by expectations that increased foreign participation will improve liquidity, support valuations and accelerate professionalisation across the sector.

Analysts said real estate had been one of the last major asset classes in the Saudi market with meaningful ownership constraints, and its opening removes a long-standing barrier for global funds seeking exposure to the Kingdom’s growth story.

The reform applies to companies listed on the Saudi Exchange and reflects Riyadh’s broader push to attract international capital under its economic transformation agenda.

Officials have repeatedly highlighted real estate as a strategic pillar, linked to rapid population growth, large-scale urban development and flagship projects tied to tourism, entertainment and business expansion.

Foreign access is expected to complement domestic demand generated by housing programmes, commercial construction and infrastructure investment.

Market participants cautioned that while the immediate price response has been strong, longer-term performance will depend on fundamentals such as rental yields, project execution and financing conditions.

Nonetheless, the rule change is widely viewed as a structural positive, bringing Saudi real estate closer to global norms and enhancing transparency and governance through a more diversified shareholder base.

The rally in property shares underscores growing confidence that regulatory reforms are translating into tangible opportunities for investors, reinforcing the Kingdom’s position as one of the region’s most actively reforming capital markets.