Injaz's Mohamad Rabih Itani on how to address Saudi's housing demand
Why KSA developers are planting fresh seeds for an evolving property landscape.
Around 10 years ago, the Kingdom of Saudi Arabia’s housing market began to feel mounting pressure from a growing imbalance between demand and supply. After quadrupling over the last four decades, the burgeoning Saudi population has triggered a housing shortage that has necessitated the formation of a Ministry of Housing to address the situation.
Around 4.6 million houses are needed by 2020 to cope with the current disparity: as a strong response, the government has also allocated SAR250m to build 500,000 new homes.
The following years have seen a slew of housing, commercial and land developments undertaken by private developers to satisfy the real estate demands of the Gulf’s largest economy.
An unwelcome consequence has been a production-sided mentality driven by traditional processes with little or no philosophy or master plan.
Fortunately, the emergence of new developers and a thirst for fresher developments are breathing new life into the KSA’s property landscape. More and more industry players are recognising the negative impact of pursuing old practices and are broadening their vision to better suit the needs of citizens.
This is slowly having a transformative effect on the Saudi real estate sector, which is gaining more interest among developers and is being increasingly perceived as a seedbed for industry change.
The concept of simply building for building’s sake in the Kingdom is fast becoming a thing of the past. Stakeholders are realizing that there needs to be more investment into creativity, customer satisfaction, and master planning.
So what does the future hold for Saudi real estate? What roads need to be taken, who needs to forge new paths, and what opportunities are available? Among the new players needed are more finance companies that can foster competition that favors customers, and operation and facility management companies that offer new services beyond maintenance and cleaning.
In terms of industry focus, lease and rent contracts need to be clearer especially in sensitive areas such as annual increases in order to avoid market chaos.
More attention should also be given to master planned communities rather than the current crop of unit blocks in order to create homogenous communities. The allocation of retail and other amenities within the community itself should also be prioritised.
From an aesthetic point of view, developers should transition away from monotonous colors and themes and embrace livelier external designs. They should also elevate the status of landscaping and emphasise the role it plays in providing beauty and balance to surroundings and habitats.
Lastly, pricing: developers and owners should look more closely into building more affordably-priced units, especially as the Kingdom’s low- and middle-income population is rapidly expanding. There should be extra effort exerted to build housing that caters to all market segments.
The real role of real estate developers goes beyond simply building malls and villas. They have a responsibility to help improve the lives of community members and genuinely build for the future.
With the local property industry undergoing a sea of fresh change, Saudi Arabia can look forward to developments that are socially and environmentally responsive and reflect a sector that truly cares for the lives it touches.
By Mohamad Rabih Itani, Vice President, Marketing, Injaz Development Co