Saudi's property market valued at over $500bn
Developers balance opportunities with frustrations over redtape
The level of investments in real estate projects in Saudi Arabia has been valued at around $533bn (SR: 2tn), according to the chairman of Taifah Al-Aqar.
Khaled Al-Ghamdi said that housing is one of the major problems facing the Kingdom, with the city of Jeddah alone requiring one million new units by 2020 as the population rises, according to Arab News.
“The Kingdom’s housing need in 2020 is estimated at 4.5m units at an estimated cost of SR: 117bn ($31.2bn) annually,” said Al-Ghamdi.
“There is demand for 100,000 residential units in the city every year,” he added.
He also said that deals worth an estimated $5.7bn had been carried out in Jeddah during the past three months alone.
Meanwhile, Arab News also reported that private sector developers at the recent Cityspace conference were calling on the Kingdom's government to work with them to streamline bureaucratic procedures in order for them to develop much-needed housing to stave off a potential crisis.
Given the conference's keynote address, the CEO of developer Ewaan, Ahmed Al-Thaqafi, said: “Among the limits and challenges facing Saudi developers, is for example the regulations concerning the Municipality’s issuance of licenses, which must have a shorter processing time from the current minimum of at least two years up to a maximum of four years.
"In addition, the government should revise the mortgage law further, as we feel that the implementation of the current draft will have a negative effect on developers and financing companies."
He also argued that an agency was needed to regulate spiralling land prices which was making the process of development difficult.
Al Thaqafi said the Kingdom's rapidly-growing population was becom,ing increasingly urban - heaping pressure on demand for housing in key city centres like Jeddah, Riyadh and Dammam.
“It is expected by 2025 that urbanization will increase the population of large cities by between 52-58%, causing more demand for housing that very few will be able to afford due to increased inflation and a lower income level,” he added.