Wafi Programme: Protecting Off-Plan Buyers in Saudi Arabia’s Housing Boom
The Wafi programme is Saudi Arabia’s government framework for regulating the sale and lease of off-plan real estate units — properties sold before or during construction. Launched by the Ministry of Housing and now supervised by the Ministry of Municipalities and Housing with regulatory responsibilities being transferred to REGA, Wafi ensures transparency and protects the rights of developers, buyers, investors, and regulators in the rapidly growing off-plan market. In a housing ecosystem where approximately 26,000 units were launched through the Sakani platform under off-plan sales projects during the first half of 2025 alone, and where NHC commands 62 percent market share in off-plan projects, Wafi’s regulatory framework determines the rules and safeguards under which billions of riyals in pre-construction transactions occur.
The programme’s significance extends beyond consumer protection. Wafi is an essential enabler of housing supply at scale. Off-plan sales allow developers to secure buyer commitments and capital before completing construction, reducing development risk and enabling faster project launches. Without a credible regulatory framework guaranteeing buyer protections, off-plan demand would collapse — and with it, a significant portion of the housing delivery pipeline that Saudi Arabia needs to achieve its 70 percent homeownership target by 2030.
Historical Development and Regulatory Migration
Wafi was established during the early years of Vision 2030 as one of several institutional innovations designed to professionalise and scale Saudi Arabia’s housing sector. The programme reflected an understanding that the traditional build-then-sell model could not deliver housing at the speed and scale required. Off-plan sales — common in advanced real estate markets globally but relatively new at scale in Saudi Arabia — offered a solution, but only if buyer confidence could be established through rigorous regulation.
The initial regulatory framework was designed by the Ministry of Housing, drawing on international best practices from off-plan sales regulation in the UAE (RERA), Australia, and the United Kingdom. The framework addressed the key risks that had undermined off-plan markets in other jurisdictions: developer insolvency, project abandonment, misrepresentation of specifications, and delayed delivery.
The regulatory migration from the Ministry of Municipalities and Housing to REGA reflects the broader consolidation of real estate regulatory functions under the dedicated sector regulator. REGA’s expanding mandate — encompassing FAL licensing, Ejar rental regulation, foreign ownership implementation, and now Wafi oversight — creates a unified regulatory authority that can coordinate across all segments of the real estate market.
Scale and Scope
As of September 2025, 434 Wafi-approved off-plan projects are active across Saudi Arabia, with 350 qualified real estate developers operating within the programme. In 2023, over 101,942 housing units were authorised for off-plan sale across these licensed projects. Small and medium project licenses increased by 63 percent, and 35 exhibition licenses were issued for showcasing 42,180 units under construction — demonstrating the programme’s breadth across the developer ecosystem from major institutional developers like NHC and ROSHN to smaller, specialised firms.
The Sakani platform serves as a key distribution channel for Wafi-licensed projects, with approximately 26,000 housing units launched under off-plan sales projects during the first half of 2025. This integration means that Sakani-eligible families can access Wafi-protected off-plan purchases with full subsidy support including REDF profit coverage, Dhamanat guarantees, and VAT exemption for first-time homebuyers. The convergence of Wafi’s regulatory protections with Sakani’s subsidy architecture creates a uniquely accessible and secure off-plan buying experience.
The 119 Housing Program projects currently under construction, providing more than 155,000 units, operate within the Wafi framework. NHC’s 134,000+ new housing units launched in 2025 across 25 urban destinations in 17 cities include significant off-plan components subject to Wafi regulation. ROSHN’s community portfolio — from SEDRA’s 30,000+ homes to MARAFY’s 52,000+ units — similarly operates under Wafi oversight for its off-plan sales activities.
Licensing Framework and Developer Qualification
Wafi’s licensing framework establishes the entry requirements for off-plan market participation. Developers must obtain a qualification certificate from the Wafi Committee prior to registration on Etmam (the Real Estate Developer Registry). Applications are considered within 10 days of completion. The qualification process ensures that only financially and technically capable developers participate in off-plan sales, reducing the risk of project abandonment that has plagued off-plan markets in other jurisdictions.
The licensing system covers multiple activity types: licenses for sale and rental of off-plan units, marketing off-plan foreign real estate, selling off-plan raw land, marketing domestic off-plan real estate, and showcasing off-plan units at international exhibitions. Each license type carries specific requirements tailored to the nature of the activity and the risks involved.
The licence application process requires a feasibility study including financial data (development budget, funding sources, financial projections), construction data (timeline, methodology, contractor qualifications), and marketing data (target market, absorption projections, pricing strategy). The feasibility study requirement serves as a quality filter — developers who cannot produce a credible feasibility study are unlikely to have the capacity to execute a successful off-plan project.
The 70 new developers qualified under the Developer Support Program in 2025, raising total certified developers to 310, expands the base of qualified participants. The Ministry’s partnerships with 36 international developers across 7 countries bring additional expertise and capacity to the Wafi ecosystem. The agreements signed with Chinese developers for construction of 100,000 homes in 2026 represent the largest single international partnership in the programme’s history and will operate within the Wafi regulatory framework.
Escrow Account Architecture
Wafi’s escrow account system is the financial cornerstone of its buyer protection architecture. The system operates on several mandatory principles.
Dedicated project accounts. All purchase amounts must be deposited into dedicated escrow accounts for each project, managed according to completion milestones and payment schedules. The project-specific nature of escrow accounts prevents cross-subsidisation — where a developer uses funds from one project to complete another — which is one of the most common causes of off-plan project failure globally.
Unified numbering. Each project must have an escrow account with a unified number referenced in every sale contract with beneficiaries. This unified numbering system creates an audit trail that regulators can trace from the sale contract through to the escrow account and onwards to the disbursement records, enabling comprehensive monitoring of fund flows.
Prohibition on direct payments. Developers are prohibited from receiving any amounts directly from buyers — all funds must flow through the escrow account. This prohibition eliminates the risk of developers diverting buyer funds to personal use, unrelated business activities, or other projects. Every riyal paid by a buyer is held in trust until released according to the Wafi Committee’s disbursement rules.
Milestone-based disbursement. Developers cannot depend exclusively on buyer funds to complete projects; the Wafi Committee specifies the percentage of works required before disbursement from escrow, ensuring developers have sufficient capitalisation. This disbursement structure aligns the release of buyer funds with verifiable construction progress, creating a natural incentive for developers to maintain construction pace.
Maximum reservation deposit. The reservation deposit is capped at 5 percent of the value of each real estate unit, all deposited into the designated escrow account. This cap limits buyer exposure during the initial commitment phase — a period when the buyer has made a financial commitment but construction may be in early stages and the risk of project modification or cancellation is highest.
Buyer Protection Mechanisms
Beyond the escrow system, Wafi implements multiple buyer protection mechanisms that collectively create one of the more comprehensive off-plan regulatory frameworks in the Gulf region.
Late delivery compensation. If a developer fails to deliver on time, 7 percent annual compensation is imposed in favour of the buyer. This compensation rate is designed to be sufficiently punitive to incentivise on-time delivery while providing meaningful financial relief to buyers who experience delays. On a SAR 800,000 unit, the 7 percent annual compensation amounts to SAR 56,000 per year of delay — a substantial penalty that aligns developer incentives with buyer expectations.
Structural and mechanical warranties. Developers must provide warranties for structural and mechanical works lasting up to 10 years. This long warranty period covers the most expensive potential defects — structural failures, waterproofing problems, HVAC system malfunctions — that may not become apparent until years after delivery. The 10-year period exceeds warranty requirements in many comparable markets and provides buyers with long-term protection against construction quality failures.
Standardised contracts. The 2024 regulatory reforms introduced standardised contract requirements for off-plan sales, ensuring that key terms — including delivery timelines, specification details, escrow provisions, warranty terms, and compensation mechanisms — are clearly documented and consistent across the market. Standardised contracts reduce information asymmetry between developers and buyers and provide a clear basis for dispute resolution.
Transparency requirements. Developers must disclose project specifications, delivery timelines, financial arrangements, and escrow account details in all marketing materials and sale contracts. REGA’s advertising standards — requiring brokerage licence number, property details, pricing, and contact information — apply to off-plan marketing, creating a layer of regulatory oversight on developer communications.
Enforcement and Compliance
Wafi conducts rigorous enforcement: 1,130 field inspections were carried out in 2023, a 28 percent increase from the previous year. These inspections verify construction progress, check escrow account compliance, review developer qualification status, and assess whether projects are on track for their committed delivery timelines. The 28 percent year-on-year increase in inspection volume reflects the programme’s commitment to scaling enforcement in pace with market growth.
Enhanced enforcement since 2022 decreased the rate of fraud and non-delivery by 68 percent — a significant improvement in buyer confidence that has contributed to the sustained growth of off-plan demand. The 68 percent reduction demonstrates that regulatory enforcement produces measurable results: developers facing credible inspection and penalty regimes are far more likely to comply with their obligations than those operating in a permissive regulatory environment.
The enforcement framework includes graduated penalties for non-compliance: warnings for minor violations, fines for material breaches, suspension of Wafi licences for serious or repeated violations, and referral to criminal authorities for fraud. REGA’s expanding enforcement capacity — including the 1,130 field inspections and the broader regulatory infrastructure being developed through the foreign ownership and FAL licensing programmes — supports increasingly effective Wafi compliance monitoring.
Integration with the Broader Housing Programme
Wafi’s integration with the broader housing programme creates a regulatory umbrella that covers the entire off-plan supply pipeline. The programme’s interaction with other housing institutions operates on multiple levels.
Sakani integration. Off-plan units listed on the Sakani platform must be Wafi-licensed, ensuring that subsidy-eligible families receive regulatory protection alongside financial support. The combination of Wafi’s buyer protections with REDF’s subsidy support and Dhamanat’s guarantee creates a comprehensive safeguard architecture for first-time homebuyers entering the off-plan market.
NHC and ROSHN oversight. Even government-linked developers operate within the Wafi framework for their off-plan sales activities. NHC’s 62 percent off-plan market share and ROSHN’s community launches across seven major developments all comply with Wafi escrow, licensing, and buyer protection requirements.
REGA regulatory coordination. The transfer of Wafi oversight to REGA consolidates off-plan regulation with brokerage licensing (FAL), rental regulation (Ejar), and market transparency under a single regulatory authority. This consolidation enables REGA to identify and address cross-cutting risks — such as a developer with compliance issues across multiple Wafi projects, or a broker marketing non-licensed off-plan units.
Mortgage lender coordination. Banks and finance companies providing mortgage financing for off-plan purchases rely on Wafi’s regulatory framework to mitigate construction risk. The escrow account system ensures that buyer payments are protected even if the developer encounters financial difficulties, while the late delivery compensation mechanism provides buyers with financial relief that helps them continue mortgage payments during construction delays.
Market Impact and Future Development
The Wafi programme has fundamentally reshaped the dynamics of Saudi Arabia’s off-plan housing market. The 434 licensed projects, 350 qualified developers, and over 101,942 units authorised for off-plan sale in 2023 represent a market of substantial scale — one that did not exist in its current form before Wafi’s establishment. The 68 percent reduction in fraud and non-delivery has built the buyer confidence necessary for the off-plan model to function at the scale required by the housing programme.
Looking ahead, the off-plan market will continue to grow as the supply pipeline expands. The USD 43 billion five-year housing construction plan, NHC’s SAR 60 billion in investment opportunities for 2026, and the continued development of ROSHN’s seven communities will generate substantial new off-plan inventory. The agreements with Chinese developers for 100,000 homes in 2026 alone will require Wafi licensing, escrow management, and enforcement oversight for projects at an unprecedented scale.
REGA’s capacity to scale Wafi oversight in pace with market growth will be tested. The 1,130 inspections conducted in 2023 may need to double or triple as the project count grows. Digital monitoring tools — including automated escrow account tracking, construction progress verification through satellite and drone imagery, and AI-powered anomaly detection in developer reporting — could enable REGA to scale enforcement without proportional increases in inspector headcount.
The Wafi programme’s evolution from a consumer protection mechanism to a market-enabling regulatory infrastructure illustrates the role of institutional design in housing policy. By creating a credible framework that protects buyers without impeding legitimate development activity, Wafi has enabled the off-plan market to become a primary delivery channel for Saudi Arabia’s housing transformation.
For related coverage, see NHC Communities, Sakani Program, ROSHN Developer Profile, FAL Brokerage Licensing, Housing Supply Dashboard, and NHC Cityscape Agreements 2025.