By Joanna Hartley
Rapid population growth and legal moves to allow mortgages to fuel real estate growth.
One million homes will be needed in Saudi Arabia over the next five years as real estate development and property investment takes off in the Kingdom, it was revealed on Tuesday.
The boom will come on the back of rapidly expanding population, which is growing by 2.5 per cent a year, and a new law that will see mortgages available in the country for the first time later this year, said the organisers of Cityscape Saudi Arabia. “Anyone who doubts the potential for continued high levels of real estate investment and development in Saudi Arabia only has to examine some of the statistics,” said event director, Deep Marwaha.
“With a population of 25 million people growing at 2.5 percent a year, Saudi Arabia is set to double its population in 28 years. In addition, 40 percent of Saudi nationals are under the age of 20 and 70 percent under 30. If that is not enough, 65 percent of families currently don’t own a home,” he added.
The government has also announced aggressive spending plans on infrastructure for 2009, to take advantage of cheaper commodities such as steel, which has fallen in price by up to 70 percent since last summer.
The potential of the Saudi real estate sector was recently summed up in UK-based Architects Journal as ‘unique” in the GCC.
“There are an awful lot of people in Saudi Arabia genuinely looking to buy a building. Demand is variously quoted at 200,000 homes a year, with a current 500,000 home deficit and thus one million new homes needed within the next five years,” the journal said.
Cityscape Saudi Arabia, a two-day conference starting in June 14 will feature a series of panel discussions on the impact of the global financial crisis on real estate investment and development in the Kingdom.
It will also discuss updates on the regulatory system, legislation and mortgage law; Shariah and conventional opportunities in real estate investment; and the residential needs of the Kingdom.