What’s on the horizon for Saudi real estate market?
The consumers’ current economic trends and surgical budget trims have recently impacted the Kingdom’s real estate market. However, the big cheer from the home buyers is the recent mortgage reform announcement from the government to revive the industry, which includes: mortgage cap to 85%; buyer investment/down payment to 15%; and several housing units by the Ministry of Housing.
The Council of Ministers’ approve ministers’ approval on establishing the “Real Estate General Authority” and applying the “Saudi Building Code” system are lauded as a key reform measure in the vast real estate sector of Saudi Arabia.
Commenting on the above: “The Kingdom’s real estate market is going through a shift,” said Anees Ahmed Moumina, Chief Executive Officer of SEDCO Holding Group. “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.” Mr. 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 wide 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 general projects. Intimate for Real Estate Services offers real estate brokerage, operations, consultation and valuation, and construction development.
Hattan Tasji, Real Estate Corporate Investments Director at SEDCO Holding Group, stated: “The new white land fees will increase the tendency to sell, boosting supply and bringing prices down. Undeveloped land makes up 77 percent of Riyadh’s total land, 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 the 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. The national Saudi population is expected to grow to 30 million by 2020.
