Saudi Arabia allows foreign investment in homes from $270

• Ghaneem offers fractional ownership
• Property market open to foreigners
• 13% of GDP in real estate

Saudi Arabia has approved a company to offer fractional home ownership to non-residents and foreigners, expanding access to its property market. The move comes just days after the kingdom formalised new real estate ownership rules for overseas buyers.

Saudi Arabia is trying to pull in more foreign investment as the government continues to rein in public spending. 

Riyadh company Ghaneem, licensed by the Real Estate General Authority (Rega), is offering the fractional ownership service. It makes clear that would-be investors do not need to be living in the country. 

The minimum investment is SAR1,000 ($267). 

Ghanteem states investors will get a deed with their purchase, detailing the percentage of ownership. Owners will have any profits on rented units paid out quarterly. There is also the possibility to reinvest dividends back into the platform on additional fractional homes. 

At the Cityscape Global event in November, Rega CEO Mohammad Al-Suliman spoke about the need for fractional ownership to stimulate the housing market.

“Developers today don’t want to go for financing,” he said. “The lending rates are very high. Here’s where fractional ownership comes in. Imagine that a developer wants to float 30 percent of their project, such as a tower or a plaza.” 

At that time, he said the authority was tokenising 4 million “parcels”, or fractional shares, across property in the country.  

Further reading:

• Saudi Arabia targets $64bn in privatisation plan
• Saudi launches blockchain tokenisation ‘centre of excellence’
• Diriyah claims $4bn home sales ahead of property law change

Saudi investment minister Khalid Al Falih said at a conference this week: “If you look at Saudi’s GDP today, 13 percent is in real estate and construction. It is growing.

“If you look at our gross capital formation, a quarter is in real estate. It is literally the bedrock of our economic growth and gives the foundation for our other sectors. With all the new reforms, it is already starting to attract global capital.”

“There are certainly geoeconomic uncertainties, volatility, and concerns about the macroeconomy. Potential bubbles. In such an environment, people tend to reallocate capital prudently, but real estate is always a safe haven to go to.”