New Saudi legislation to boost realty market

New Saudi legislation to boost realty market

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Red Sea Mall, Jeddah, Saudi Arabia
Red Sea Mall, Jeddah, Saudi Arabia

JEDDAH — The current economic trends and surgical budget trims by the consumers have recently impacted the Kingdom’s real estate market. However, the big cheer from the homebuyers is the recent mortgage reforms to revive the industry which include: mortgage cap to 85%; buyer investment/down payment to 15%; and offering of number of housing units by the Ministry of Housing. The approval by the Council of Ministers in the establishment of “Real Estate General Authority” and application of “Saudi Building Code” system was also lauded as a key reform measure in the Saudi real estate sector.

Anees Ahmed Moumina, Chief Executive Officer of SEDCO Holding Group, commenting on the developments, said: “The Kingdom’s real estate market is going through a shift. Over the past two years, real estate transactions have declined. We expect that the recently introduced white land taxes will help spur housing supply to get more and more Saudis to own homes, which in itself is part of the National Transformation 2020 and Saudi Vision 2030.”
Moumina believes that the Saudi real estate industry will witness growth and development in the coming years, citing a solid economy and unrelenting demand from different sectors.

SEDCO Holding Group manages a broad variety of asset classes in real estate. Its diversified portfolio includes shopping centers, hotels, residential communities, office buildings, industrial spaces, and raw land in the Kingdom’s major cities.

The Group operates through an efficient, well-structured network of operating companies and partners, each of which specialized in certain aspects of the real estate industry. SEDCO Development Company develops major greenfield projects, such as the Galleria project in Jeddah, and the Gardenia Residence complex in Jeddah’s Al Salamah 2 district. Al-Mahmal Real Estate Development handles the day-to-day operations and maintenance of shopping malls, residential communities, and projects in general.
Intimaa for Real Estate Services offer real estate brokerage, operations, consultation and valuation, and construction development.

Hattan Tasji, Real Estate Corporate Investments Director at SEDCO Holding Group, said: “The new white land fees will increase the tendency to sell, boosting supply and bringing prices down. Undeveloped land makes up 77 percent of the total land in Riyadh, 55 percent of Jeddah, and 60 percent of Dammam. Thus, the main purpose of the fees system is to prompt landowners to either develop and use land or put it up for sale.”

At current population growth rate, demand for residential units in the Kingdom ranges between 150,000 to 200,000 units a year, with some four million new units needed over the next 15 years, as the Saudi population is expected to grow to 30 million by 2020.

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