RIYADH – Housing is a major concern for the largest portion of the Saudi population as 65% of Saudis are not homeowners, according to the Central Department of Statistics and Information (CDSI).
To intensify this issue, the Saudi population of just over 28 million is drastically increasing. According to CDSI’s demographic report of 2011, population increased 2.5 % in 2011 and is expected to reach the 30 million mark by 2017.
Currently 70% of Saudi government officials receive a monthly salary of less than SR8,000 but the cost of land is too high in the Kingdom’s main cities, and it is expected that land prices and construction costs will increase in the future.
Approximately 2,400,000 Saudis are currently waiting for their housing loan applications to be approved by the Real Estate Development Fund.
If the Ministry of Housing does not solve this problem now, it will be more difficult to solve it in the future, especially given the increasing population.
Although the Ministry of Municipal and Rural Affairs has provided the Ministry of Housing with millions of square meters of land to set aside for housing construction projects, Saudis are not impressed by the results it has yielded thus far.
Low-income Saudis expect the Ministry of Housing to design practical and swift solutions as well as long-term ones to the housing problem. They also expect the ministry to implement the King’s directives calling on the government to provide all Saudis with the opportunity for homeownership.
Shortage of funds is not a contributing factor to the problem, according to economic experts. Forty years ago, the government established the Real Estate Development Fund that provided citizens with long-term repayment option loans. During this time, 800,000 citizens benefited from said loans and were able to build their houses. However, due to the enormous number of applicants, the fund could no longer meet the increasing demands. With a growing need for financial support, the King issued a Royal Decree to set up the Ministry of Housing and provided the fund with SR40 billion.
Last year, King Abdullah allocated SR250 billion to build 500,000 residential units all over the Kingdom. The ceiling of loans was also increased to SR500,000.
The Ministry of Housing should adopt more effective implementation methods to stimulate the housing sector. It should start coordinating with other ministries such as Finance, Justice, Municipal and Rural Affairs, Education, Transport, and Water and Electricity as well as the Saudi Arabian Monetary Agency to design such solutions.
The ministry should issue an effective housing policy that will allow all Saudis an opportunity for homeownership. Only then will it be able to implement the King’s directives.