- August 13, 2021
- Posted by: machsuperuser
- Category: Uncategorized
In the Kingdom of Saudi Arabia, the government aims to diversify the economy by boosting the real estate market in the coming years. The Kingdom’s Vision 2030 englobes home ownership targets by delivering 1 Million new homes (as part of a national program) and relaxing the ban on ownership by non-Saudis in Makkah and Madinah by allowing companies listed on the Saudi Stock Exchange to own properties. The latter was seen as a major move by the government to encourage foreign investment and to permit non-Saudi investor ownership in the prime markets hence boosting the demand for commercial real estate over the medium to long-term.
This move is also in line with the city of Riyadh’s aim to become one of the 10 largest cities in the world and to increase its population from 15 to 20 Million by 2030. It’s important to highlight that Saudi Arabia currently has a population of 32 Million growing by more than 2% annually. It is dominated by young middle-class citizens who are first-time buyers, as 45% of the country’s population is below 20 years old. The demand from expatriates has further intensified the housing shortage with around 5.5 Million expat workers in the country. With younger Saudi nationals and expatriates displaying a preference for apartments and more affordable properties, the government is taking steps, such as incentivizing developers, in order to build affordable housing projects, thereby, encouraging banks to introduce more financing options.