JEDDAH – Speakers at a seminar here Saturday called for establishing a real estate bank to make housing affordable for everyone.
People in the Kingdom tend to spend 40 percent of their salaries on rents and this amount even increases when they are buying homes, Gagan Suri, Vice-President and head of real estate asset management at National Commercial Bank Capital, told Saudi Gazette on the sidelines of the Residential and Affordable Housing summit.
He suggested that housing will become affordable if government gives subsidized land, banks give loans to investors and developers, and people opt for apartments instead of villas.
Riyadh Al-Thuqafi, CEO of Ewaan Global Residential Company, shed light on the global definition of affordable housing and the requirements of the Saudi community.
“The main issues facing the need for affordable housing in Saudi Arabia are population growth and income levels, but we also have internal issues such as escalating land prices, the preference of Saudis for large, expensive houses and the unwillingness of banks to offer project financing. In order to solve these issues, the government sector must work with private sector developers," he said.
The summit took place on the sidelines of the Jeddah Urban Development and Real Estate Investment Event – Cityscape Jeddah, which was opened by Prince Mishal Bin Majed, Governor of Jeddah, Saturday.
More than 50 local and regional exhibitors are displaying their projects and services to an expected 10,000 visitors.
The annual event comes at a critical time when all the major players in the market from real estate developers to home finance companies are trying to adjust their strategies to complement the three mortgage laws published by SAMA last week.
All the major real estate companies are present at the event but most visible is the huge participation of Saudi banks and home finance companies.
“This signals the huge demand for home financing in Saudi Arabia,” said Hussain Al Harthi, Managing Director of the National Exhibitions Company.
“The surge of activity comes in response to the approval of the mortgage law and the three laws published by SAMA last week which obviously triggered developers and financiers to take swift actions and get ready to provide innovative solutions in line with the new passed laws.”
Rayadah Investment Company, the real estate arm of the Saudi Public Pension Agency, showcased its mega residential project in north Jeddah which is expected to cover 10 percent of the total real estate market needs for the next 10 years. Located in Obhur, Al Raeda Residential project comprises 8,000 units on a 2.5 million square meter site and is planned to be completed in one phase.
It is divided into 10 neighborhoods, five allocated for residential buildings, and five for villas, in addition to a central zone for multi-purpose usages. The project is also comprised of 24 schools, 15 mosques, a general hospital, a health club and a hotel supported with commercial shops to service guests.
Maceen Capital, a specialized and dynamic investment group, was present at Cityscape Jeddah this year to promote its SR83 million real estate fund invested in developing a residential project in north Jeddah, Villatee Residential Project which consists of 52 upscale villas in a unique location in Obhur. The villas are available in five different architectural designs and sizes catering to different tastes and lifestyles.
“The location was selected very carefully to offer a unique living experience were new Jeddah is being shaped,” said Bader Al-Hammad, CEO of Maceen Capital. “The project is scheduled to be completed in two years and all services and facilities are available in one location to guarantee a quiet, flexible and successful lifestyle.”
“The shortage of housing options for all Saudi residents, the opening of the Saudi Arabia property market to a greater and wider variety of tourists and travelers, and a drive to design a Saudi Arabian landscape that reflects communal requirements, as well as the aspirations of a dynamic Kingdom, are some of the issues driving the real estate market in Saudi Arabia,” said Al-Harthi.
Sumou Real Estate Company, once again a principal sponsor of Cityscape Jeddah, revealed a new and ambitious project in the Western Province, Dahiat Sumou.
“Bawabat Makkah is a visionary city to be built on the western edge of the Makkah Holy Region, adjacent to the boundary line of the Jeddah-Makkah Expressway. The area of the city will occupy approximately 1.8 square kilometers of land and will provide much needed suitable, residential housing to an estimated population of 25,000 people,” Eng. Khaled Al-Telmesani, CEO of Sumou said.
Masharef Residential Project developed by Kinan International Real Estate Development also grabbed the attention of visitors. The 1 million M2 project site is located north of Jeddah and offers a wide range of products such as villas, apartments and residential/commercial land. Kinan’s project targets the mid-income segment and the first two phases of the project have already been sold. Handover of units for the first phase began at the end of 2012.
Among other exhibitors, Capitas Group International’s (CGI) Wahid Sarij, Executive Vice President and Head of Development Management Services, said "from an initial idea to evaluation of feasibility, formation of a development plan, management of design and through to construction and hand-over, great real estate projects must be managed with a guiding vision and professional discipline. We are committed to delivering this through our Development Management Services. We see the level of activity in Cityscape this year as a reflection of the importance of real estate in the growth of Jeddah.”
With extraordinary projects underway in the Kingdom, the Jeddah Urban Development and Real Estate Investment Event - Cityscape Jeddah, is one of the leading real estate events in the region, supporting the government’s vision for growth in the real estate industry, highlighting iconic architecture and innovative development, and providing direct access to the region’s biggest real estate market – Saudi Arabia. — SG