With the budget 2013 set to be announced in a few days, all eyes are set on the real estate market in Saudi Arabia.
The real estate market in the Kingdom has shown an impressive jump in recent times due to a rapidly growing housing sector. The housing sector performance has been boosted by access to soft loans under different funding programs, such as Real Estate Development Fund (REDF), and other government subsidies to cement and steel companies.
The government is expected to continue with the same policies to ensure stable growth in the under-served real estate sector. With a rapidly growing population and changing family needs, housing market in the Kingdom is in strong demand and feeling the pressure to provide sufficient houses.
The housing sector has received tremendous boost through REDF, which is providing an estimated SR 30 billion for new projects. About 60,000 applications for soft loans have been processed under this program. The success of this program highlights the government’s seriousness in improving the infrastructure, rail and road network, and utilities across the Kingdom.
According to Abdul Rahman Al-Saeed, REDF director in Makkah, “every village, town and city in the Kingdom is passing through a building boom benefiting from the increasing state support to the real estate fund and other funding agencies”.
The city of Makkah has witnessed astounding development in the housing, hospitality and infrastructure building sectors of the economy. Reports suggest that the city is seen as a role mode for developmentl in the country and will soon boast the largest number of residential hotels in the world.
Government support in the form of funding and subsidies for associated industries is key to sustain momentum of the Saudi real estate sector. Any budgetary cuts may hurt Saudi chances of achieving self-sufficiency in the housing market. Experts believe that the government should also consider providing additional incentives to the construction sector and enforce close monitoring of cement companies to check the price and avert any artificially created crisis