While the new housing decrees are set to boost Saudi real estate sector, the on-the-ground reality is that the country's housing authorities do not have the capacity to build 500,000 homes. Meet the key Saudi players in real estate.
May 10, 2011
09 May 2011 While the new housing decrees are set to boost Saudi real estate sector, the on-the-ground reality is that the country's housing authorities do not have the capacity to build 500,000 homes. Meet the key Saudi players in real estate.
The Saudi real estate sector received a major fillip with the announcement that 500,000 new housing units will be built in the Kingdom. This is an urgent need of the Saudi population, and it is already proving to be a challenge given that the current infrastructure is not sufficient to immediately supply those 500,000. While nobody expects the entire plan to be executed within a year, there are questions on how the government will go about creating the necessary infrastructure and all the added developments such as roads, civil structures, and utilities be put in place.
The key players are seeking clarity and the quicker the Saudi Government can outline a plan, the faster developers can fulfill the dreams of 500,000 Saudi families.
Saudi Real Estate: On The Ground Realities While the recent announcements by Saudi King Abdullah bin Abdulaziz AlSaud are expected to boost the country's real estate sector, the authorities do not have the capacity or expertise to develop the 500,000 units on their own; hence, the collaboration of public and private sectors will be a pre-requisite, says Bahrain-based SICO in a research note.
"No timeline has been set for the completion of the development and historically such government backed project take a long time to materialise considering the delays and utility services related issues," says SICO.
Saudi-based NCBC estimates that the country will need an additional 973,000 units over the 2010-15 period and a total of 2.1-million units over the coming decade, or 215,000 units per year.
