Ministers, Jeddah mayor and SAMA Governor tackle the issue of housing at an interactive final session of the opening day in the Jeddah Economic Forum on Sunday with each offering unique solutions on the issue. — SG photo
JEDDAH — The Minister of Economy and Planning Mohammad Al-Jasser said, “We will not overcome the issue of housing through exaggeration while ignoring achievements. What we are looking for rather is to be accurate when stating new data and not exaggerating the issue of lacking houses in the Kingdom.”
He added that the housing projects would provide new job opportunities to the public. The government, he said, would look into all issues related to urbanization that includes the issue of pollution, and increase in crimes, need for water and power supply, as well as other challenges. He said: “Providing houses will help create political and social security.”
The minister was answering a heated question from a member of the public during the last session of the first day at Jeddah Economic Forum. The question was, how would the Ministry of Housing help overcome the issue of housing by not only giving a chance to investors to get more money from the public while not helping the public overcome their housing issues. The question also asked if any new procedure would be applied on empty lands in the cities.
According to the Minister of Housing, who replied, they will consider applying new fees on empty lands.
Al-Jasser said Saudi Arabia faced a challenge because of the unexpected increase of number of expatriates in the Kingdom from 1992 to 2010 — by nearly 82 percent — while Saudis have increased by 52% in the same period. “Majority of expatriates are living in rented units, and the problem is that there are no up to date data that addresses the housing issue. What we have in hand is that there are 4.3 million houses in the Kingdom and 970,000 unoccupied units.”
When addressing the housing issue, Al-Jasser said, not only lands and building units can solve the issue rather infrastructure needs has to be provided for buildings to turn into housing units that are beneficial for end consumers. “About 67 percent of all Saudis living in the Kingdom are living in urban cities, many have moved from rural areas and settled in cities adding to the existing issue of housing,” said Al-Jasser.
The Kingdom, he added, has recognized this issue and therefore it has allocated SR277 billion to build housing units, SR340 billion for infrastructure, and SR250 billion for sewage system. The housing fund has so far provided 175,000 loans in the last seven years, which is more than what has been provided in all previous housing plans before.
The number of licenses that have been issued in 2011 reached 103,000, which are 3 times all licenses given by the Ministry of Rural Affairs in 2003, explained Al-Jasser.
Shuwaish Al-Duwaihi, the Kingdom’s Housing Minister, said that they will soon be implementing a renting system that will help link different real estate offices together, and it will also monitor and ensure all contracts that are written between different parties, and it will also ease the online financing and online payment. In addition the new system will also provide new statistics that are related to providing houses. They are also working with government to establish a new court for housing.
Answering a question about allowing the presence of NGO in the Kingdom, the minster said they will be available, and according to him, when permitted soon in the Kingdom, the NGOs will help provide charitable housing and will also give potential housing programs that can help alleviate the issue.
Minister of Commerce and Industry Tawfiq Al-Rabeah, said that they will work on protecting all parties involved in the housing, this includes the end consumers, financing bodies such as banks and developing companies. “We hope to protect the consumers to make sure the houses are provided on time and that spending is reasonable, on top of that we want to ensure about the quality of the units and reduce the prices as well as increasing the profession and skills of people in the real estate market.”
Saudi Arabian Monetary Agency Governor Fahad Al-Mubarak said that there are 100 companies that provide financing, while 900 companies are doing financing as a side services. All these financing constitute 3% of the market value. There is an increase in the mortgage in the Kingdom by 25 percent explained Al-Mubarak adding that he expects the percentage to increase in the coming years. According to him they will be launching a new real estate financing company that will be under the umbrella of Public Investment Fund and will be set at a budget of SR5 billions.
The new mortgage rules have been issued and will be printed and fully implemented within two years, and “companies will have to contact us within 9 months if they hope to continue their services or if they choose to leave the market.”
Another suggestion to solve housing issue was provided Hani Abu Ras, Mayor of Jeddah who spoke on behalf of Minister of Municipal and Rural Affairs Prince Mansour Bin Mite’b. Abu Ras said that they have a plan that brings about cooperation between owners of empty lands, the private sector and the Ministry of Rural Affairs. This cooperation, he said, when achieved can help increase the number houses with the owners of empty hand encouraged to invest their lands in cooperation with the ministry and the private sector. This he said can help increase the number of houses by 45% to 85%.
According to him there is an annual need for 72,000 housing units in Jeddah alone while so far only 110,000 housing units have been provided in the city. “We should not also forget the issue of non-urban districts of Jeddah, we have these districts stretched over 56,000 kms in Jeddah, we can develop these districts and help the people living there move to better conditions.”