Opening the gateway

The latest news, tenders and projects from Jeddah, Saudi Arabia.

Jeddah - Saudi Arabia's gateway city. It provides a key to the region for millions of Muslim pilgrims who travel to Makkah and Madinah every year. But, due to an under supply of housing, the surging urban sprawl and a lack of infrastructure, the door that leads to the vast city remains merely ajar.

With an expected population growth of 2.25 million by 2029, there is a high demand for residential properties, and while its all well and good producing luxurious state of the art towers, the real problem lies in the old parts of the city where, according to a report put forward by Jones Lang La Salle last month, there are around 900,000 people living in ‘unplanned settlements,' otherwise known as slums.

"Jeddah scored relatively poorly in our recent Mena Investor Sentiment Survey, with investors ranking the city below others in the region on a range of criteria including infrastructure, sustainability and real estate market transparency," the report says.

Over the years there has been a preference for low-density buildings and high land-take development, which affects affordability as it drives up demand for, and therefore the price of, land. This has lead to a severe under supply of low-cost housing.

A lack of a mortgage law in the city is also leading to the younger generation living with parents or forced into ownership with huge costs.

"The residential sector has been negatively impacted by reduced consumer confidence and limited credit availability that has particularly impacted the sales of waterfront property," Jones Lang La Salle research manager Fayyaz Ahmad says.

Jeddah Development and Urban Regeneration Company (JDURC), an executive arm of the Jeddah Municipality, is at the heart of initiatives to improve this situation and in May this year it put forward the Jeddah Strategic Plan, mapping out the city's development over the next 20 years.

"The demand is really high in the city. People are taking advantage of the drop in building material prices and are constructing more," strategic management of land and property for the Jeddah Development and Urban Regeneration Company vice president Dr Abdullgader Amir told Construction Week.

But he also explains: "The supply [of housing] is not yet close to meeting the demand."

Regeneration

As part of the 20 year plan, the overall aims for Jeddah, are to produce 283,000 housing units to meet immediate deficiency. These must include 80,000 affordable and 151,600 replacement housing units for the currently inadequately housed population in planned and unplanned areas. JDURC also aims to provide an additional 670,000 units by 2029 to accommodate population growth.

According to Amir, the most important plan for Jeddah is for the redevelopment of the Khozma and Ruwais areas of the city.

Joint ventures have been created with private developers and investors to clear and rebuild these run down areas.

JDURC's strategy is to relocate people from these areas to new and affordable communities to the east of Jeddah.

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