Mecca draws influx of foreign capital as Saudi Arabia eases property rules

MECCA, Saudi Arabia – The train from Jeddah glides into town with a reminder on the travel app that this stop is “for Muslims only.” 

The station could be anywhere in the Gulf – dotted with souvenir shops, mobile phone counters and a Costa coffee kiosk. Once you step outside, though, a sense of history and holiness reigns.

For more than 1,400 years, Mecca has been defined by worship. Now, increasingly, it’s also shaped by real estate, with construction cranes dominating the skyline.

“Why would people like me, and others who can afford it, want to buy there? To relax, to be close to God,” Anis Alhabshi, Vice President of real estate developer Arabian Dyar, said in an interview with The Circuit. “It has spiritual value.”

Muslims are drawn to Mecca because it is the birthplace of the Prophet Muhammad and home to the Kaaba, the cube-shaped sanctuary at the center of the Grand Mosque. Every day, millions around the world face it during prayers. The Hajj pilgrimage – one of the five core obligations of Islam – must be performed at least once in a lifetime by Muslims who are physically and financially able.

Many also visit the city and nearby Medina year-round on Umrah, a shorter pilgrimage involving rituals such as circling the Kaaba and walking between two small hills to recall the story of Hagar and her son. 

The sanctity of the city means only Muslims are permitted to enter – making Mecca a global spiritual capital with an audience limited by religious law. That exclusivity has always set Mecca apart from Saudi Arabia’s other tourism sites. 

Just a four-hour drive away, the kingdom is building resorts at the Red Sea, opening up archaeological marvels like AlUla, and promoting futuristic attractions such as NEOM – all designed to bring in Western travelers and non-Muslim spenders.

In Mecca, the balance is shifting. Saudi Arabia is overhauling the holy city at breakneck speed to accommodate a new kind of pilgrim: those who want to stay longer, return often, and even buy a second home in sight of the Grand Mosque. 

Developers such as Jeddah-based Arabian Dyar are racing to meet that demand. State-backed giants, including Jabal Omar Development Co., which has already built one of the world’s largest hotel and residential complexes in Mecca, are expanding.

A pivotal shift came in 2025, when Riyadh passed a real estate law allowing foreigners to buy or lease property in the kingdom for the first time in decades. The rules introduce “designated zones” for non-Saudis to own homes, including parts of Mecca. Details remain limited, and ownership is expected to be restricted to Muslims, but developers say the policy has already triggered calls from investors across the Middle East and Asia.

Dyar’s first project two years ago was marketed only to Saudis because foreigners were excluded by law. Under the eased rules, the company is trying to sell Muslims from abroad on the prospect of buying second homes in close proximity to  the Grand mosque.

Religious tourism is one of Saudi Arabia’s most valuable non-oil assets – worth roughly $12 billion a year, about 20% of the non-oil economy. Planners of the kingdom’s Vision 2030 development blueprint want that number to soar, projecting $350 billion in annual pilgrimage-linked revenue early next decade.

“The devil is in the details,” Alhabshi said. “But the country is… opening up to the world.”

On the ground, the transformation is visible block by block. Entire neighborhoods are wrapped in scaffolding, and glass towers rise beside century-old streets once lined with pilgrim hostels. 

Longtime residents are adjusting. “Having 1,000 hotels is not like having 100,” said Talal Alghuraybi, a retired soldier in his 60s. “Mecca has changed a lot. We don’t always recognize it anymore.”