JEDDAH — Based on the 2016 Saudi budget, real estate experts and investors in the Kingdom are anticipating in the coming period a remarkable revitalization of the real estate investment sector.
During his speech, the Custodian of the Two Holy Mosques King Salman declared the government’s direction to launching a comprehensive economic, financial and structural reform program to build a strong economy based on solid foundations and diversified resources of income, while minimizing the negative impacts on middle and low-income citizens.
With a total value exceeding SR1.3 trillion and estimated to reach SR1.5 trillion in the coming years, the real estate sector is becoming one of the most attractive investment sectors in Saudi Arabia, since, unlike any other sectors, it is recognized for its low risk investment opportunities driven by, rigid and inflexible prices, steady returns, sustainable growth of the industry, and the high unmet demand.
Hence, experts believe that 2016 indicators carry a lot of corrective expectations for this promising sector.
Though the 2015 indicator of the real estate market ended with 22.5% decline in the total value of transactions compared to 2014, settling down at 348.4 billion riyals compared to its highest records of 449.7 billion riyals during 2014, the government’s current directions and recently approved legislations are fully capable of strongly boosting the real estate sector in the long run and to provoke the market towards growth.
The taxes on undeveloped urban land set to be activated before the middle of the current year, and the new regulation of confining property valuation profession to the members of the Saudi Authority for Accredited Valuers, would both regulate the process of real estate sale and purchase and bestow more confidence and peace of mind for clients, in addition to encouraging more capitals into real estate investment especially for those who seek safe and long term investment.
Essam Al-Ghamdi, Marketing and Strategy director, RAFAL Real Estate Development, said: “We are at the beginning of a new path to deal with the negative repercussions and resolve the complications that we face. Everyone has felt that the kingdom is about to impose reforms that promote the domestic development and ability to confront future challenges. The government’s new strategy is a confirmation of their efforts and commitment to raise the standard of living and reduce unemployment rate through the establishment of the Commission for Job Generation and Anti-Unemployment as well as the Saudi Council of Economic and Development Affairs, and the activation of the national transformation program in 2020 to mark 2016 as the new beginning of the Saudi economy.” — SG
