Yet mindful of the lessons of the post-1973 oil boom, the Saudis are spending their money cautiously this time when it comes to buying properties in Saudi Arabia. The Saudis have realized that they must change, and are encouraging foreign investment and developing the non-oil sector.

After deep recession in the 1990s, a Foreign Investment Law was passed in April 2000 to encourage a service-oriented economy. It relaxed visa procedures for tourists, and encouraged direct foreign investment.

Seven months later a new Real Estate Law allowed legally-resident non-Saudis to own real estate for their private residence, provided they get a license from the Ministry of Interior.
The law also allows ownership of real estate by foreign investors in order to conduct their business activities, and for the accommodation of their employees, again with permission from the Ministry of Interior. To prevent speculation, five years must elapse before property can be sold.

Foreigners are allowed to own real estate, subject to approval of the licensing authority.

However, foreign ownership is forbidden in Mecca and Medina, except through inheritance.

Non-Saudi Muslims are can obtain leases of up to two years in these cities. Leases are renewable for the same period.