Layan Damanhouri
Saudi Gazette
JEDDAH — Foreign investment companies remain absent in the real estate market in the Kingdom due to lack of clear laws and regulations. This was disclosed at a seminar recently held by Ewaan Global Residential Company.
CEO of Ewaan, Riyadh Al Thagafi, referred to the reluctance of foreign investors to invest in real estate market in the Kingdom that has witnessed a population boom in recent years and a rising housing crisis.
Invited speaker Dr. Tariq Fadaaq who is a Shoura Council member and professor in architecture at King Abdulaziz University, said “foreign investors are least likely to invest because they look at the regulations and protection laws before considering business opportunities.”
According to recent statistics, those owning homes total to 60 percent of the population. The numbers further revealed that apartments resided by nationals amount to 28 percent while expats living in apartments are estimated 87 percent.
In terms of nationals, 31 percent of Saudis live in houses and villas while 28 percent currently live in public housing.
However, Fadaaq indicated that the Kingdom is undergoing a youth population boom, a “positive indication because it means there is demand in the long run.” Currently, purchasing power is not mature enough with a large portion is not planning or thinking of purchasing property or a house.
There are approximately 6 million housing units where 4.6 are occupied and 970,000 vacant units, a visible discrepancy.
The latest official reports reveal the Ministry of Housing has constructed a mere total of 27,000 housing units.
Moreover, the average Saudi family has 6.45 individuals while the expat family has typically four.
Spaces in architectural design need to be reconsidered, added Fadaaq. “Some developments of housing units and compounds are designed very efficiently within the space allotted.”
Parking spaces further cause a problem in congestion with a need to develop public transportation systems. “The parking in buildings is adopted by foreign standards. It’s not compatible with the average Saudi family that has more than two cars.”
Officials of the Housing Ministry further discussed the need for public private partnership in increasing productivity, where the private sector is predicted to tackle the slow growth of solving the housing crisis and meet deadlines more efficiently.
The ministry of housing recently launched the 10th Development Plan amid a reshuffle that appointed a new minister who is a former real estate developer.
The ministry seeks to fulfill urgent goals as part of the 5-Year Plan, including developing regulatory frameworks in the housing sector, developing and diversifying programs of housing funding, sustaining the housing market in meeting market demands, and increasing supply of housing units and properties.
With public funding still strong, Fadaaq noted, liquidity in the market is equally a positive factor.
