JEDDAH - Saudi Arabia has kick-started plans to build 500,000 affordable homes throughout the Kingdom, with Jeddah leading demand for new housing projects.
Jeddah municipality undersecretary Ibrahim Ketabkhane said demand for affordable housing in the country was reaching a crucial stage, and that programs were already in play to address that demand.
Speaking on the sidelines of the 10th International Real Estate, Financing and Housing Exhibition 2012, Ketabkhane said “this real estate sector is one that is growing in importance in the Kingdom. There is no doubt that the real estate sector makes Jeddah a prominent economic city in the Kingdom, as Jeddah needs 100,000 housing units each year just to meet demand. In 2020 Jeddah will need about a million units.”
“Jeddah witnesses many real estate development plans because it is a city that attracts investors, workers, tourists as well as pilgrims. Such a large number of visitors also led to an increased demand for real estate. The amount of real estate investment in the city is estimated at more than SR2 billion ($533 million).”
Separately, CBRE Group Inc. Bahrain Research Team said in a study that Saudi Arabia’s mortgage market is the least developed among the six Gulf Cooperation Council states.
“Saudi Arabia has the largest real estate market in the GCC, but the least developed mortgage market,” CBRE said in a report Tuesday. “This has resulted in a shortage of owner- occupied residential housing, particularly at the lower end of the income scale.”
CBRE said only 2 percent of home purchases have been financed through mortgages. That compares with 17 percent in the United Arab Emirates and 70 percent in the UK.
King Abdullah, Custodian of the Two Holy Mosques, pledged to spend more than $82 billion to fund homebuilding last year. - SG/Agencies