Demand for affordable housing in Saudi Arabia is significant

Cityscape connect business breakfasts in al khobar and jeddah to address affordable housing issues

Jeddah, 07 April 2012: Lack of supply of affordable homes is a concern in the MiddleEast as a whole and no more so than Saudi Arabia. According to various studiesand analysis, the discrepancy between supply and demand of housing units inSaudi Arabia is significant. Such huge demand for new residential properties inSaudi Arabia has led to the establishment of the Ministry of Housing in 2011.

CityscapeConnect Business Breakfasts is a platform that provides realestate investors and developers with an opportunity to network while gainingvaluable market insight from a panel of real estate experts. Notable speakers atthe CityscapeConnect Business Breakfasts in Al Khobar and Jeddah will addressthe Kingdom's affordable housing debate and tackle the home buyers' expectationon affordable housing among other discussions. They are taking place from 9am atthe Mövenpick Hotel in Al Khobar on 8 April 2012 and the Jeddah Hilton Hotel on9 April 2012.

Commentingon the market's lack of sufficient affordable housing,Abdulaziz Al Shaibani CEO of Al Oula, the Al Khobar Business Breakfastsponsor, said: "The government's strategy is dependent on private developers'willingness and capability to provide affordable housing. On the other hand, significantchallenges still remain in the local markets, to make affordable housingfeasible due to the huge demand gap that is outstripping supply, in addition tolegislative obstacles. However, given the fundamental demand driver, thereshould be significant opportunities for investors and developers to achievesizeable returns. As for the real estate market in general, strong populationgrowth continued economic development and diversification are set to ensurerobust demand for all types of real estate over the coming decade."

Commentingon the housing needs of the Eastern Province, Jenan's MD & CEO Dr. BassamBoodai said: "It is expected that the Eastern Province will require around150,000 housing units by 2014, which is the highest demand in theKingdom." Looking at the overall picturehe went on to say: "According to the Central Department of Statistics andInformation, Saudi Arabia's population is growing at a rate of 3.2 percent andwith about 60 percent of Saudi population under the age of 30 the private andpublic sector needs to take serious action to cater for the ever increasingdemand. The government has already taken decisive action to tackle the problemby injecting SR 250 billion into affordable housing and now it's up to theprivate sector to accommodate the demand. A collaboration between the privatesector and the government will be the most effective approach to meet theincreasing demand in a record time."

SaudiArabia has traditionally been a country where home construction or purchase wasself-financed, with family and personal savings being the major driver ofproperty financing. This is starting to change as progress is being made inmortgage financing and new regulations for off-plan financing. Bank financingis still relatively limited and out of reach for a significant proportion ofthe population. Real estate andconstruction loans accounted for 7.1 % of total bank credit in 2010 while homeloans were only 2.8% of total bank credits. This is very low in comparison to other GCC countries.

"TheKingdom's real estate sector is now maturing as it begins to fulfill the highexpectations of investors. The CityscapeConnect Business Breakfasts serve as aprelude to the annual Cityscape Jeddah event in June 2012 with its uniqueportfolio of exhibition and summits which is in line with the Government'svision for growth in the real estate industry," said Deep Marwaha, GroupDirector of Cityscape. "In addition to affordability in the residential market,the Business Breakfasts will cover the need for innovative financing models tosecure the funds for project development in the current climate, profitabilitystructures for public-private partnership models, and the cost of land fordeveloping affordable housing projects in attractive locations."

Keypanelists at the Al-Khobar Business Breakfast are Dr. Bassam M. Boodai, MD& CEO of Jenan Real Estate Company; Eng. Khalid M. Telmesani, MD & CEOof Sumou Real Estate; and Abdulaziz K. Al Shaibani, CEO of Al Oula Real EstateDevelopment Company, while the Jeddah event includes experts such as GaganSuri, VP, Head of Real Estate, Asset Management at NCB Capital: Martin Cooper,Director & Head of Advisory - Middle East at DTZ; and Zuhair Hamzah,Executive Manager of Tamlik Company among many others. CityscapeConnect Business Breakfast held in Al-Khobar is being sponsoredby Al Oula real estate company.

For more information, please contact:
Saeed AlAmoudi
TRACCS -Jeddah
Tel: (+9662)6625757
Fax: (+9662) 6399540
Email: saeed.alamoudi@traccs.net