Impact of Saudization on Real Estate Offices Quality 2026: The Game-Changing Decision

Introduction: A Historic Decision That Reshaped the Real Estate Market

On October 1, 2021, a historic decision came into effect that changed the face of the Saudi real estate market forever. The Ministry of Human Resources and Social Development announced the nationalization of real estate activities and professions at 100%, meaning that work in real estate offices became exclusive to Saudis only.

This decision was not just an administrative measure, but a real revolution in a sector that contributes more than 14% of Saudi Arabia's GDP. In this comprehensive article, we will review the dimensions of this decision, the problems the market suffered from before it, the positive transformations we witnessed after it, with an objective look at the remaining challenges.

First: What is the Real Estate Office Nationalization Decision?

The nationalization decision issued by the Ministry of Human Resources and Social Development stipulates restricting work in real estate professions to Saudis at 100%. This decision came within the Kingdom's Vision 2030 objectives to empower national cadres and enhance their participation in various economic sectors.

Professions Covered by Full Nationalization

The decision included real estate brokerage professions including: real estate broker, property sales and rental broker, land and property dealer, land and property registration clerk, real estate marketer, and property owners' association manager or property manager. It also included sustainable construction professions such as: certified sustainability engineer, certified resident engineer, quality inspection engineer, and prefabricated buildings inspector. Additionally, real estate arbitration professions including: real estate arbitrator and real estate mediator.

Nationalization Rates in Other Real Estate Activities

For establishments working in general real estate activities such as owned or leased properties and real estate activities on a fee or contract basis, the decision set a nationalization rate of 70% of the total number of workers, provided that the number of Saudis in the establishment is not less than one Saudi employee as a minimum.

Second: What Was the Real Estate Market Like Before Nationalization?

To understand the importance of this decision, we need to go back a little and remember what the real estate market was like before its implementation. The picture was not rosy at all.

Shocking Statistics

Before implementing the nationalization decision, more than 37,000 people worked in the targeted real estate professions and activities. Of this number, 67% were foreign workers, while the percentage of Saudis did not exceed 33%. This significant imbalance in employment composition negatively affected service quality and the national economy in general.

Main Problems Caused by Foreign Workers

We don't want to generalize or be unfair to anyone here, as there were certainly foreign workers who worked with honesty and professionalism. But reality says the market suffered from fundamental problems due to lack of regulation and control by unqualified workers.

Commercial Concealment: The Cancer That Ate Away at the Market

Commercial concealment was the biggest problem facing the real estate market. Many real estate offices were registered under Saudi names but were actually fully managed by foreign workers. The Saudi would receive a small monthly amount in exchange for their name and commercial registration, while the foreigner managed everything and collected the profits. This situation had serious consequences for the economy and society.

Stealing Real Estate Advertisements

An annoying phenomenon spread widely, where some foreigners would steal property advertisements published on websites and republish them with their own phone numbers. The goal? To get a commission from the buyer or tenant without any right. Many people called advertised numbers only to discover that the marketer had nothing to do with the property.

Price Manipulation and Lack of Credibility

Many experts and real estate professionals confirmed that foreign workers contributed to raising prices unjustifiably. Some would offer prices lower than the market to attract customers, then manipulate them later. The lack of credibility and seriousness in buying and selling operations was a prominent feature of many of them.

Stalling Real Estate Deals

Real estate experts indicated that about 50% of real estate deals were stalled by unqualified realtors. Whether due to their lack of knowledge of regulatory procedures, incorrect information they provided to customers, or their lack of understanding of real market prices.

Random Offices

Statistics revealed that about 70% of real estate offices in city suburbs were established randomly, without the necessary academic or professional qualifications. Most of these offices sought only to make quick profits without any consideration for service quality or customer rights.

Transferring Money Abroad

One of the negative economic effects was that a significant percentage of real estate sector profits were transferred abroad instead of remaining in the local economic cycle. This drain on capital affected the market's ability to grow and develop.

Third: The Bright Sides of the Nationalization Decision

After more than four years of implementing the decision, we can observe real positive transformations in the Saudi real estate market. These transformations confirm the correctness and importance of the decision.

Consumer Rights Protection

Dealing in the real estate market now means dealing with licensed and qualified brokers. Having a clear license number that can be verified through the Real Estate General Authority platform provides an important layer of protection for consumers. If any problem occurs, there is an official body to file a complaint with.

Providing Thousands of Job Opportunities for Saudis

The Real Estate General Authority, in cooperation with the Human Resources Development Fund (Hadaf), launched the real estate sector professions nationalization program. This program aims to train and employ 11,200 job seekers wishing to work in the real estate sector. The program provides free training through the Saudi Real Estate Institute in specializations such as: property owners' association manager, facilities manager, real estate brokerage, and real estate marketing specialist.

Raising the Quality of Real Estate Services

Requiring completion of training courses and obtaining a Fal license before practicing the profession has noticeably raised the level of services. Real estate brokers are now required to understand systems and legislation, know buying, selling, and rental procedures, and deal professionally with customers.

Combating Commercial Concealment

The decision strongly struck the phenomenon of commercial concealment that was eating away at the market. It has become difficult for any non-Saudi to practice real estate brokerage, and supervision has become more effective with a unified database of licensed brokers.

Transparency and Credibility

The Fal license system established clear standards for working in the sector. Every broker has a license number that can be verified, and every real estate advertisement must be licensed. This transparency has significantly raised the level of trust in the market.

Keeping Money in the Local Economy

With the nationalization of professions, commissions and profits now go to Saudis who spend them within the Kingdom. This positive shift supports the local economic cycle and contributes to the growth of other sectors.

Better Supervision from the Real Estate General Authority

Having a strong regulatory body, the Real Estate General Authority, has facilitated the process of supervision and follow-up. The Authority can now track every licensed broker, monitor their performance, and take necessary action when violations occur.

Fourth: The Fal License System - Gateway to Real Estate Professionalism

The Fal license is the official document that authorizes individuals and establishments to practice real estate activity in the Kingdom. Obtaining this license has become a basic requirement for anyone who wants to work in brokerage or real estate marketing.

Types of Fal License

Fal license for real estate brokerage and marketing authorizes individuals and establishments to mediate in completing real estate transactions for a commission, and to market real estate through advertising or direct marketing. Fal license for property management is specific to establishments and authorizes them to manage the financial and administrative affairs of property on behalf of others. Fal license for facilities management is specific to establishments and authorizes them to manage the technical affairs of property on behalf of others. Fal license for auctions authorizes establishments to display properties for sale at public auctions. Fal license for real estate consulting and analysis authorizes providing real estate analysis and consulting to the public.

Requirements for Obtaining a Fal License for Individuals

To obtain a Fal license as an individual, you must be a Saudi national. You must be at least 18 years old. You must be fully competent and not convicted of a crime involving dishonor or breach of trust. You must pass the qualifying program that includes three training courses approved by the Authority. You must pay the financial fee of 300 riyals per year.

Requirements for Obtaining a Fal License for Establishments

Establishments have additional requirements including: having a valid commercial registration that includes the real estate activities to be licensed. The responsible manager must be fully competent and not convicted of a crime involving dishonor or breach of trust. Payment of the financial fee of 1000 riyals per year.

How to Get a Fal License?

The process has become fully electronic. First, register at the Saudi Real Estate Institute and pass the required training courses. Second, access the electronic services of the Real Estate General Authority. Third, choose your role as an individual broker or establishment broker. Fourth, go to the licenses page and click on create a new license. Fifth, choose the type of license required. Sixth, click on verify eligibility. Seventh, after verification, click on issue license and pay the fees.

Fifth: Remaining Challenges - A Realistic View

Despite the great successes achieved by the nationalization decision, realism requires acknowledging some challenges that still exist.

Some Foreigners Continue Working Behind the Scenes

Unfortunately, the phenomenon of concealment has not completely disappeared. There are still those who work behind the scenes, where the Saudi is just a front while the foreigner does the actual work. This requires tightening supervision and increasing penalties for those involved in concealment.

Need for More Qualification

Some new Saudi professionals need time to gain sufficient experience. Training courses are important, but they do not replace field experience. This is where professional mentoring and on-the-job training programs come in.

Rising Service Costs in Some Cases

Some complain about higher commissions from some Saudi brokers compared to what they used to be. This matter needs regulation from the Authority to ensure fair pricing.

Verifying Advertisers

Despite the licensing system, some real estate advertisements are still published without a license on some platforms. Activating supervision on electronic platforms is an urgent necessity.

Sixth: Faults of Some Saudis in the Profession - Necessary Candor

For the sake of fairness and objectivity, we must also mention some negatives that some Saudis working in the real estate field fall into.

Not Adhering to Appointments

Some Saudi brokers do not adhere to scheduled appointments with clients, causing inconvenience and wasted time.

Poor Follow-up

After completing the deal, some brokers stop communicating with the client even if there are remaining procedures.

Exaggerating Property Descriptions

Some marketers exaggerate the features of the property only for the client to discover the truth upon inspection.

Lack of Transparency in Commission

Some brokers do not clarify the commission percentage from the beginning, causing later disputes.

The Solution is in Rating and Reviews

It is important for real estate platforms to adopt a strict rating system for brokers, so that the client can know the broker's reputation before dealing with them. Negative ratings will push brokers to improve their services.

Seventh: The Role of the Real Estate General Authority

The Real Estate General Authority is the regulatory body responsible for the real estate sector in the Kingdom. Its role is pivotal in the success of the nationalization decision and market development.

Main Tasks of the Authority

Regulating, developing, and supervising real estate activity in the Kingdom. Issuing necessary licenses for practicing real estate activities. Setting systems and regulations governing the sector. Supervising practitioners and ensuring their compliance. Receiving complaints and dealing with them. Raising the level of transparency and reliability in the market.

Authority's Digital Platforms

The Authority has launched several digital platforms to facilitate procedures and organize the market including: Ejar platform for organizing rental contracts. Fal platform for real estate brokerage. Real Estate Exchange for property trading. Real Estate Indicators platform for providing market data.

Eighth: Tips for Real Estate Market Participants

For Property Seekers

Verify the broker's license before dealing with them through the Authority's website. Ask for the Fal license number and verify it. Do not pay any amounts until confirming the accuracy of information. Make sure to document everything in writing. Use official platforms for contracts such as Ejar. Do not hesitate to file a complaint with the Authority if you experience any violation.

For Those Wishing to Work in the Real Estate Sector

Invest in qualifying yourself through the Saudi Real Estate Institute. Obtain a Fal license before starting work. Deal with honesty and transparency with clients. Continuously develop your skills. Build a good reputation as it is your real capital.

For Real Estate Office Owners

Ensure all your employees are licensed. Do not tolerate any form of concealment. Invest in training your employees. Adopt modern management systems. Maintain your office's reputation as it is your most valuable asset.

Ninth: The Future of the Saudi Real Estate Market

Expectations indicate significant growth in the Saudi real estate market in the coming years. The expected market size reaches more than $100 billion by 2029, with an annual growth rate of 8%.

Growth Drivers

Vision 2030 mega projects such as NEOM, Qiddiya, and the Red Sea project. Population growth and increased housing demand. Government facilities for investors. Real estate exchange and easier trading. Saudi Arabia hosting major global events.

The Role of Nationalization in the Future

The nationalization decision laid a solid foundation for a more professional and transparent real estate market. Qualified Saudi cadres will be able to lead this growth and benefit from it. The new generation of Saudi real estate professionals combines academic qualification and technical knowledge, which promises a bright future for the sector.

Frequently Asked Questions

Can a non-Saudi work in real estate brokerage?

No, the nationalization decision stipulates that real estate brokerage professions are restricted to Saudis at 100%.

How much does a Fal license cost?

For individuals 300 riyals annually, and for establishments 1000 riyals annually.

Can a government employee obtain a Fal license?

According to the Authority, the responsibility of practicing another job falls on the employee themselves according to their contract with their employer. Some entities prohibit this except with written approval.

How do I verify a real estate broker's license?

Through the inquiry service on the Real Estate General Authority website, you can search by license number or ID number.

What is the penalty for working without a license?

Working in real estate brokerage without a license is a regulatory violation that exposes the owner to fines and penalties according to the real estate brokerage system.

Can real estate brokerage be practiced without an office?

Yes, individuals can practice real estate brokerage activity without having a real estate office after obtaining a Fal brokerage and marketing license from the Real Estate General Authority.

Conclusion

The decision to nationalize real estate offices was a correct strategic decision that changed the face of the Saudi real estate market. The decision addressed chronic problems such as commercial concealment and lack of professionalism, provided thousands of opportunities for Saudis, and raised the level of transparency and trust in the market.

Yes, there are remaining challenges that need to be addressed, and there are negatives that some Saudis themselves fall into. But the general trajectory is positive, and the future is promising for a sector that represents a fundamental pillar of the national economy.

If you are a Saudi and thinking about entering this field, the opportunity is in front of you. Invest in qualifying yourself, get your license, and work with honesty and dedication. The Saudi real estate market needs national competencies to lead it towards a better future.