Arab Today, arab today kingdom needs sr 13 trillion housing investment by 2020
Last Updated : GMT 17:51:31
Arab Today, arab today
Arab Today, arab today

Kingdom needs SR 1.3 trillion housing investment by 2020

Arab Today, arab today

Arab Today, arab today Kingdom needs SR 1.3 trillion housing investment by 2020

Jeddah - Arabstoday

The Saudi housing market continues to expand on the back of high population growth and increasing availability of financing alternatives. Other key determinants include the increasing Kingdom\'s GDP (gross domestic product), growing Saudi labor force and rising personal income, which all have a direct impact on the housing market. This trend will continue as the Saudi economy is expected to grow by 3.9 percent through 2012, according to a report by the National Commercial Bank (NCB) received here yesterday. The Saudi housing market is already experiencing a supply/demand imbalance and this trend is expected to continue as the supply of houses will lag behind demand. Meanwhile, the lack of affordable housing continues to be a challenging issue, especially the limited ownership of modern homes (villa) by Saudis. In addition, the artificially high prices of land plots, which are increasingly sought after in the Kingdom as a long-term investment option by high net worth Saudis, are accessibly limited to Saudi citizens and home developers. The kingdom\'s growing economy, on the back of high oil prices, has led to heavy investment in infrastructure including housing over the period 2005-2010. The Ninth Development plan for the Kingdom calls for investing SR 1.4 trillion on physical and social infrastructure between 2010 and 2014. In 2011, a royal decree was announced to allocate SR250 billion to build 500,000 housing units under the newly established Ministry of Housing. This will accelerate the supply of housing units, especially, to the low to middle income groups, the NCB report said. Demand for housing across the kingdom has centered around the three major regions, which include Makkah, Riyadh and the Eastern province. The housing concentration in these three regions are largely based on population count, housing development and available financing. Approximately 66 percent of the 27.1 residents are clustered in those three regions. Furthermore, the number of occupied homes in those same regions represent 67 percent of the total in the Kingdom. Historically, Saudi household sizes have been commonly large, thereby accommodating extended families. Meanwhile, the average household size in Saudi Arabia has been noticeably shrinking over the years. Between 2000-2010, the average Saudi household size declined from 6.08 persons per occupied unit to 5.84 persons per occupied unit in 2010, reflecting the shift from the extended family system to a smaller single family system. This phenomena has been a driving force in the rising demand for additional housing units. Demand for housing is driven by overall population growth. In addition, as previously mentioned, the average household size is on the decline, which also results in increased demand for housing units. Meanwhile, the supply of housing units has not been able to keep up with demand causing the current imbalance. On a full occupancy basis, the stock of housing units in the Kingdom increased by 1.2 million units between 2000-2010, bringing the total stock of occupied housing units to 4.6 million in 2010. This reflects the construction of 121,000 new units per annum, on average, during the same period. The major factor contributing to the supply and demand imbalance is affordability. The commonly accepted guideline that defines affordable housing is that housing related expenditures do not exceed 30 percent of a household\'s income. Total population in the Kingdom is projected to reach 37 million by 2020. Assuming the average Saudi household size maintains its declining trend thereby reaching 5.28 persons per housing unit, housing stock is expected to amount to 7,080 million units by 2020. Accordingly, total housing stock in the Saudi housing market is expected to expand by 2.4 million units during the next 10 years, with annual demand rising from 195,000 units in 2011 to 264,000 units by 2020. The public and private sectors are expected to contribute to the growth in investments within the housing sector. Based on market sources for the average housing unit cost of around SR540,000, total investment required will amount to SR 1.3 trillion, in order to develop 2.4 million new housing units between 2011-2020. This represents an average outlay of SR 130 billion per annum. The housing market has witnessed an increased commitment by private entities in the development of recent residential real estate projects. These projects, not only were sizable, but also have focused on providing home ownership opportunities in addition to improved building quality and standards. In the first half of 2011 alone, approximately SR 10 billion in contracts were awarded for housing developments. The growth and diversification of the housing sector generally depends on a robust regulatory framework where legal policies are enforced and executed. The lack of a mortgage law in the Kingdom has hindered the potential growth of the housing sector, thus causing many financial institutions and developers to maintain low-risk portfolios. The recently passed mortgage law, including other related laws, aims to rectify currently existing obscurities and to protect the interests of all direct and indirect participants, the NCB report said. From : Arabnews

arabstoday
arabstoday

Name *

E-mail *

Comment Title*

Comment *

: Characters Left

Mandatory *

Terms of use

Publishing Terms: Not to offend the author, or to persons or sanctities or attacking religions or divine self. And stay away from sectarian and racial incitement and insults.

I agree with the Terms of Use

Security Code*

Arab Today, arab today kingdom needs sr 13 trillion housing investment by 2020 Arab Today, arab today kingdom needs sr 13 trillion housing investment by 2020

 



Name *

E-mail *

Comment Title*

Comment *

: Characters Left

Mandatory *

Terms of use

Publishing Terms: Not to offend the author, or to persons or sanctities or attacking religions or divine self. And stay away from sectarian and racial incitement and insults.

I agree with the Terms of Use

Security Code*

Arab Today, arab today kingdom needs sr 13 trillion housing investment by 2020 Arab Today, arab today kingdom needs sr 13 trillion housing investment by 2020

 



Arab Today, arab today
Arab Today, arab today Youssra depended on colored foam

GMT 16:53 2017 Tuesday ,05 September

Youssra depended on colored foam
Arab Today, arab today Lufthansa chief eyes up to 78

GMT 11:29 2017 Thursday ,21 September

Lufthansa chief eyes up to 78
Arab Today, arab today Etiquette expert underlines importance of gifts

GMT 17:52 2017 Sunday ,03 September

Etiquette expert underlines importance of gifts
Arab Today, arab today Rouhani at UN defends Iran nuclear deal

GMT 09:41 2017 Thursday ,21 September

Rouhani at UN defends Iran nuclear deal
Arab Today, arab today Saudi Arabia to unblock internet calling apps

GMT 11:31 2017 Wednesday ,20 September

Saudi Arabia to unblock internet calling apps
Arab Today, arab today
Arab Today, arab today
Arab Today, arab today Ministry seeks to improve education

GMT 14:49 2017 Sunday ,17 September

Ministry seeks to improve education
Arab Today, arab today New Zealand opposition looks

GMT 10:35 2017 Thursday ,14 September

New Zealand opposition looks
Arab Today, arab today Puerto Rico, Virgin Islands brace

GMT 12:01 2017 Wednesday ,20 September

Puerto Rico, Virgin Islands brace
Arab Today, arab today The history of solar eclipses

GMT 05:16 2017 Sunday ,20 August

The history of solar eclipses
Arab Today, arab today Intel chips loaded in Waymo

GMT 14:43 2017 Wednesday ,20 September

Intel chips loaded in Waymo
Arab Today, arab today Five trends at the Frankfurt auto show

GMT 12:04 2017 Monday ,18 September

Five trends at the Frankfurt auto show
Arab Today, arab today Actress Ream Hhagag prepares for a new film

GMT 09:40 2017 Tuesday ,19 September

Actress Ream Hhagag prepares for a new film
Arab Today, arab today France hopeful of persuading Trump

GMT 06:21 2017 Wednesday ,20 September

France hopeful of persuading Trump

GMT 12:14 2017 Monday ,18 September

Horia Farghaly happy for success of “Case G”

GMT 05:05 2017 Tuesday ,12 September

Pregnant woman's suicide roils China

GMT 16:53 2017 Saturday ,02 September

Mai importance of gifts during Eid Al-Adha

GMT 19:18 2017 Monday ,18 September

5,000 'Dieselgate' deaths in Europe per year

GMT 10:46 2017 Saturday ,05 August

Nanis reveals simple ideas for home renovation

GMT 04:26 2017 Wednesday ,20 September

Opioid overdose deaths take 2.5 months

GMT 16:04 2017 Tuesday ,19 September

Egypt tourism revival steady but slow

GMT 17:12 2017 Monday ,07 August

Al-Shawaifi reveals secrets of total solar eclipse

GMT 12:46 2017 Thursday ,21 September

Google likely to buy stake in Taiwan smartphone maker HTC

GMT 11:37 2017 Saturday ,12 August

Fashion designer reveals her new collection
Arab Today, arab today
Arab Today, arab today
 
 Arab Today Facebook,arab today facebook  Arab Today Twitter,arab today twitter Arab Today Rss,arab today rss  Arab Today Youtube,arab today youtube  Arab Today Youtube,arab today youtube
arabstoday arabstoday arabstoday arabstoday
arabstoday arabstoday arabstoday
arabstoday
بناية النخيل - رأس النبع _ خلف السفارة الفرنسية _بيروت - لبنان
arabstoday, Arabstoday, Arabstoday