Saudi to ink $100b housing accommodation deals
Saudi Arabia is close to striking deals with South Korean and Chinese firms under a $100b project to build one million low-cost homes across the Kingdom over the next five years, its housing minister said
An estimated 1.6 million Saudis are currently on waiting lists for government housing programmes.
The government, which last year signed memorandums of understanding with those countries to develop some 200,000 properties on state land, expects to receive final proposals from the companies by mid-May, Majed bin Abdullah Al-Hogail (pictured) confirmed, according to Reuters.
As the country works to resolve a shortage of affordable housing, Al Hogail is also seeking partnerships with American builders and met with US Housing and Urban Development Secretary, Dr. Ben Carson during the first week of May 2017 in Washington DC. "We are already talking to some developers. We think very soon there will be some agreements signed," he said.
State funds will provide seed capital but Riyadh hopes private firms and banks will provide much of the investment and bear some of the risk. "We are now developing the PPP (public-private partnership) programmes with local and international developers. We hope by having both of them and by adopting new building technologies, we can respond to the demand within five years," Al Hogail added.
Over the last year, the government has tweaked financing rules to encourage mortgage lending and introduced a "white land" tax to push more undeveloped urban land into the market. Al Hogail estimated the tax would bring in an expected $267m to $533m annually.
He is also opening up new routes to finance construction in a country where fewer than 2% of some 6.4 million existing homes were built with the help of banks. Current access to housing finance satisfies only 3% of demand, he said.