Affordable housing could save KAEC

The KAEC development includes housing, a port, and industrial and commercial areas

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Emaar shifts focus in Saudi Arabia to affordable housing in King Abdullah Economic City (KAEC) as demand slumps.

Emaar, the developer in charge of the KAEC, has told The National it is “significantly” accelerating low and moderate housing developments in the massive 163 sq km development because of slow demand and rising prices for housing.

"With the financial crisis we don't have as much demand and we're not developing as fast," Fahd al Rasheed, the chief executive of Emaar, The Economic City, a joint venture with Emaar, the developer based in Dubai, and the Saudi Arabian General Investment Authority, told the newspaper.

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The KAEC is the first development in Saudi to offer non-nationals the ability to own freehold property. Foreign ownership will be a "massive" component of the development, al Rasheed added.

Affordable housing is a massive issue in the Kingdom with only about 30 percent of Saudi households owning their homes. Capitas Group International (CGI) estimates that if regulation changes to property ownership are approved in the next few months, a US$32 billion mortgage market could be opened up.