Saudi Arabia plans to build one million homes

Cranes are seen behind the Grand Mosque in the KSA. Construction in the Kingdom is booming. (Getty Images)

According to available statistics, the Saudi Arabian market for residential development is going to design, plan and build more than a million homes over the next five years, says Deep Marwaha, event director for Cityscape Saudi Arabia.

“With a population of 25 million people growing at 2.5% a year, Saudi Arabia is set to double its population in 28 years,” explains Marwaha.

“In addition, 40% of Saudi nationals are under the age of 20 and 70% under 30. If that is not enough, 65% of families currently don’t own a home.”

While population statistics speak for themselves, legislative measures in the Kingdom and plummeting material costs across the globe are creating a proverbial perfect storm of real estate development.

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After a mortgage law is passed later this year, for the first time in Saudi Arabia, financial institutions will offer mortgage-style repayment plans to help young families and other potential owners finance their homes.     

Moreover, in an effort to take advantage of reduced material costs — steel, for example, has fallen 70% since last summer — aggressive spending plans are already in place for the remainder of 2009.

 While the KSA government has reassured investors that the lion’s share of development will be used for civil infrastructure and education projects, the population statistics cannot be ignored. 

“Uniquely among GCC states, there are an awful lot of people in Saudi Arabia genuinely looking to buy a building,” explains the UK’s Architects Journal in its KSA country profile. “Demand is variously quoted at 200,000 homes a year, with a current 500,000 home deficit and thus one million new homes needed within the next five years.”

The Construction Week Saudi Arabia Conference is being held tomorrow in Jeddah.

Cityscape Saudi Arabia runs from June 14-16, 2009, and expects approximately 100 exhibitors and around 5000 participants, making it the Kingdom’s premier real estate investment and development event.

 

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