Real Estate Registry: Good News for Foreign Investors

Saudi Arabia is trying to attract more foreign capital than it has in the past decade. They have recently launched the Real Estate Registry. As the name suggests, it focuses solely on real estate sector matters and updates current data in the online sphere.

It’s long overdue, such a developed country has lagged behind its neighboring UAE, where this has been present for quite some time. It’s worth noting that this innovative approach allowed the Arab Emirates to transition almost entirely online, even in the visa issuance sphere. Foreign property investors can buy houses almost entirely online, provide online evidence of ownership, and obtain a visa for long-term residence in an approved free zone.

Saudi Arabia also plans to create particular regions for foreigners to reside in. Predictably, they’re mirroring the United Arab Emirates, given their earnings. Launching this application in the real estate rights is a significant milestone for the entire continent.

Platform Responsibilities

The platform’s responsibilities is managing a centralized registry in a modern format. Here, there will be meticulous control over real estate transactions and more. For instance, foreigners and citizens of the country can arrange mortgage loans, which will be recorded in this unified system. This may hint at centralizing state banking systems and real estate into a single entity. We have to determine the full extent of the changes this may bring to the financial sector.

Significantly, the Minister of Municipal and Rural Affairs introduced this innovation. It is entirely unclear whether this was coordinated with other ministers, as the economic representative of the kingdom. The historic launch of the Real Estate Registry (RER) took place at the Saudi Proptech Summit in Riyadh.

Foreign investment in the Saudi real estate market has been increasing due to changes in government regulations that allow foreign companies to operate in the kingdom without a local headquarters. In 2022, 928 new licenses for foreign investment were issued, reflecting an 8.8% increase year on year. This is a fantastic digital opportunity to enhance the economic atmosphere.

Real Estate Registry of Saudi Arabia

This innovation is a part of the broader concept of e-government, a system that has long been operational in developed Eastern countries. Citizens and certain groups of foreigners can now register mortgages using just the internet, without visiting bank branches. The owners can also register specific rights and obligations of individuals.

Registering individuals based on their residence will be relatively easy. It’s worth noting that this application is the first to provide such a capability. Despite all the digital advancements within Saudi Arabia, this was previously impossible in one unified place. The Saudi Arabian real estate market is expected to grow from USD 64.43 billion in 2023 to USD 94.19 billion by 2028, at a CAGR of 7.89%

CEO’s Emphasis on Centralization and Transparency

Dr. Mohammad Al-Suleiman, the CEO of RER, hinted that the centralized system primarily aims to increase transparency in transactions. He didn’t explicitly mention potential investments from foreign entities. His entire discourse emphasized the centralization launch, especially in the real estate sector.

Security Concerns and Technological Solutions

The focus was on security, but the specific measures for ensuring security within the unified registry should be clearly outlined. Such secure registries are susceptible to hacking attempts. The Saudis may have implemented this system based on blockchain technology, which would be prudent in the modern context.

Regardless, their efforts aimed to centralize financial organizations, potential buyers, property owners, and developers, who can now communicate with potential clients through a unified platform. We’ll be closely monitoring the development of these initiatives because they genuinely alter the entire financial sector of Saudi Arabia.