Banque Saudi Fransi says in new report that homes needed to meet growing population in kingdom
Saudi Arabia needs 1.65 million new homes by 2015 to meet growing demand in the world's largest oil exporter, Banque Saudi Fransi said in a report on Sunday.
Saudi Arabia, the biggest Arab economy, is facing a massive housing problem due to rapid population growth and an inflow of expatriate workers coming to the kingdom which is rolling out a $400bn infrastructure spending plan.
"We estimate private and public developers will need to build about 275,000 units a year through 2015 for a total of 1.65 million homes over six years," the report said.
This figure would "cater to demands of a population that has doubled in size since 1988 and grows more than 2 percent annually" it added.
Last Friday, Saudi King Abdullah offered $93bn in handouts which included SR250bn to ($66.7bn) be spent on 500,000 new homes.
"Considering the housing supply-demand gap and the impending boom in youth demand for homes, we are bullish on the housing sector and confident the mortgage law will widen the scope of home ownership in the long term.
"Still, reforms to address the market's structural deficiencies will need to compliment the law. Developers must focus on building supply of affordable housing since prevailing salaries are largely not high enough to support a mortgage finance boom," the report said.
Saudi Arabia's long-awaited mortgage law has been in the planning stages for almost a decade.
The kingdom's annual inflation slowed to a 10-month low of 4.9 percent in February, with growth in housing and transport costs subsiding, data showed on Sunday.
Saudi Arabia's population is expected to reach 30 million in 2017, double the figure just 30 years ago, new research by Euromonitor International has revealed.
Its analysis of the kingdom's population growth to 2030 also shows the number will hit 36.5 million by the end of the period under review, representing a near-40 percent rise compared to 2010.
The biggest problem in KSA is the gap between what is expected as "Affordable Housing" by Saudi standards and the cost they are prepared to pay for them.
Based upon the allocation by King Abdullah, a 250m2 home for US$133,000 with 5 bedrooms (all with ensuite bathrooms), a maids room, majlis, & separate mens & womens entrance is going to be a hard task in the given timeframe & budget.
The solution is to utilise new modern building methodolgies, instead of traditional 200mm blocks and concrete. Not only will this dramatically shorten the construction timeframe, but also will allow for far more energy efficient dwellings, hence reducing the power requirements for a country that is already bending under the strain of current demand.
I hope for the people of KSA that the ruling family can make it work for them. With such a large population under 18, and such a strain on public housing, how long before we see an Egypt or Bahrain situation in the Kingdom?
Basically you have to turn upside the housing designs.. Houses must be built like cars; cheap and energy efficient, but not in concrete !!! alternative is poor concrete jungle scenes similar to 1960s experiences in the UK and you'll fill the desert with dumped waste...