Saudi Crown Prince Mohammed bin Salman bin Abdulaziz recently announced the allotment of 20 million square meters of land in north Riyadh towards the development of a residential area.
The land allotment is aimed to expand the Al Jawan suburb to 30 million square meters, with 53,000 new residential units built under a private partnership.
The new housing units come on top of 20,000 previously announced units, in line with Vision 2030, which outlines several goals for Saudi real estate. In further alignment with Vision 2030, the Saudi government will also be relaxing a home ownership ban in Mecca and Medina, Arab News reported
OWNERSHIP OPENED TO INTERNATIONAL COMPANIES
At the same time, companies listed on Tadawul, Saudi’s stock exchange, will also be allowed to own properties in Mecca and Medina. This is likely to drive demand for commercial real estate, and prop up Saudi real estate for a stronger post-pandemic recovery, Arab News reported.
Residential real estate is a priority of the Saudi government, especially as demand for this sector is rising. However, affordability is a key challenge for residential real estate in Saudi Arabia.
Vision 2030 aims to tackle this and other issues in this sector. This includes a waiting period of 12 to 15 years for housing subsidies, with waiting lists running into hundreds of thousands of beneficiaries. By outlining specific goals for the industry, the agenda also aims to solve the lack of a cohesive policy for real estate in Saudi Arabia.
DRIVING INVESTMENTS, OWNERSHIP FOR REAL ESTATE IN SAUDI ARABIA
In a statement to Saudi Press Agency, Minister of Municipal and Rural Affairs and Housing Majed Al-Hogail noted that Saudi’s housing sector contributed over SAR 115 billion (over USD 30 billion) to the country’s GDP. Riyadh represented almost half the country’s non-oil economy, he added.
Al-Hogail further said that lower costs of development in Riyadh incentivised infrastructure and real estate projects, including housing. Growing private sector participation would enable Riyadh to accelerate towards becoming one of the 10 biggest global economic cities, one of the goals under Vision 2030.
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