New research from PwC Middle East, titled, ‘Transforming the Housing Sector in Saudi Arabia’ was recently released. The research offers insights into the Saudi Arabian government's plan to restructure the housing sector. It also lists the two primary key performance indicators intended to guarantee the programme's successful implementation as well as the significant projects that make up the programme.
EXPANSION OF SAUDI ARABIA’S HOUSING MARKET
The number of homes needed in Saudi Arabia was 99,600 in 2021, and by 2030, that number is anticipated to rise by more than 50% to 153,000. Over 1.6 million Saudi citizens were on waiting lists for government housing programmes in 2017.
Since then, the Kingdom has created the "Housing Program in 2018". With the help of this initiative, the aim is for more Saudi families to have access to well-located, quality, safe, and affordable homes. Additionally, it reiterates Saudi Arabia's commitment to tackling issues including population growth, urban sprawl, a lack of affordable housing, and an unregulated self-build industry.
In recent years, in line with Vision 2030, the Ministry of Municipal and Rural Affairs and Housing (MoMRA) has collaborated closely with the private sector to ease the path to homeownership, encourage developers, and offer housing solutions and products that meet the needs of citizens at competitive and subsidised prices. The following are some of the major projects the study names as having positively impacted the Kingdom's transformation:
MAJOR PROJECTS TRANSFORMING THE SAUDI ARABIAN HOUSING MARKET:
Access to finance:
This crucial aspect directly attacks the problem of unaffordable homes through numerous government-backed programmes, tackling the obstacles brought on by a high mortgage interest rate environment. With the Saudi Real Estate Refinance Company (SRC) having invested more than SAR 6.5 billion by the end of 2020 and intending to refinance 20% of the Kingdom's residential mortgage market by 2025, access to sustainable financing alternatives remains crucial. The Saudi Central Bank's assistance has been essential in the sector's expansion, lowering the minimum down payment requirement for property purchases from 30% to 5% of the purchase price and expanding the number of banks that provide housing loans.
Real estate development:
The Kingdom has continued to expand the private sector's role, notably in the creation of excellent, safe, and conveniently situated housing while also enhancing access to finance. To attain a housing supply of 4.96 million dwellings by 2030, the Kingdom will need to build around 1.2 million additional homes during the next ten years.
Increased regulation:
The General Authority for Real Estate, a new central regulatory body for the real estate industry, was established in 2017 with the goals of regulating the industry, encouraging investment, and safeguarding consumers. The stabilisation of the real estate rental and buyer markets is aided by efforts like Ejar, which manages the interactions of all parties involved in the renting process. The real estate market's anticipated growth rate also presents a chance for off-plan transaction growth, which would be backed by increased security provided by programmes like the Wafi Programme. These programmes help govern off-plan property sales, rental processes, and transactions.
Enhanced beneficiary journey:
The improvement of beneficiaries' journeys is a key component of developments within the Saudi housing market. This component, which includes numerous important programmes like the Mulak Programme, Shrakat, and Sakani, is crucial for improving poor consumer satisfaction levels. These efforts strengthen the collaboration between the public and commercial sectors to offer an affordable housing supply and solutions that cater to residents' requirements. But the efforts also help to digitally enable Saudi homebuyers to submit an online application for their first home.
