Saudi Arabia Enters Real Estate Classification Phase, Restricts Advertising to Licensed Practitioners

Saudi Arabia is moving to classify real estate brokerage and marketing establishments, signaling a significant development in the sector's regulation. The Real Estate General Authority announced the upcoming release of two draft guides for classifying these businesses, aiming to enhance data clarity and practice quality.

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The entry into the real estate classification phase, and the upcoming release of two draft guides for classifying real estate brokerage and marketing establishments and real estate auction establishments through the "Istitlaa" platform.

This initiative follows the "Istitlaa" platform's role in developing standards. Furthermore, real estate advertising will now be exclusively handled by licensed practitioners holding a "FAL license." This move is expected to professionalize the advertising landscape within the industry.

The Real Estate Brokerage Law, which came into effect three years ago, has overseen a remarkable market activity. Over 13 million sales and rental transactions have been registered, totaling more than 1.6 trillion riyals ($426.6 billion). These figures underscore the market's substantial size and the crucial role of licensed brokers in regulating relationships, documenting transactions, and improving service quality.

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Real estate advertising will be restricted exclusively to those licensed to practice real estate brokerage and marketing activity through the FAL license.

During the third edition of the Real Estate Brokerage Forum, the Real Estate General Authority reviewed key indicators. Since the law's inception, over 117,000 real estate brokerage licenses have been issued to individuals and establishments. Additionally, 1.1 million brokerage contracts and over 1.2 million real estate advertisements have been recorded, demonstrating the expanding scope of licensed practices and regulated advertising.

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The number of sales and rental transactions registered since the Real Estate Brokerage Law came into effect in Saudi Arabia has reached more than 13 million transactions, with a total value exceeding 1.6 trillion riyals ($426.6 billion).

The forum also delved into significant market changes and the tools enabling brokers to adapt, including evolving regulations, real estate technologies, artificial intelligence, and shifting consumer behavior. Discussions also touched upon the developmental and investment transformations within the Kingdom and their potential impact on the future of real estate brokerage. Speakers emphasized that the existing regulations have fostered a clearer contractual environment.

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The total number of real estate brokerage licenses issued to individuals and establishments reached more than 117,000 licenses, and the number of brokerage contracts reached 1.1 million.