The Saudi real estate sector has not exactly gone gangbusters. When the Saudi King Abdullah Bin Abdulaziz Al Saud announced in March a number of measures to stimulate the sector and make housing more affordable, it was expected to be the cue for explosive growth in the real estate market.

Instead, it is a slow burn. Investment bank Rasmala expects the Saudi real estate story seems to be on a positive trajectory. “However, we expect mid single digit increases in house prices over the next two years.” READ MORE HERE

With the ongoing rebound in economic activity, a question that emerges is whether inflation will increase again as it did in 2007–08 when the annual increase in consumer prices peaked at 11.1 percent in July 2008. Many of the drivers of inflation then are also present now, including higher food prices, depreciation of the nominal effective exchange rate, expansion of credit, and rising government spending.
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The MENA region has a shortage of 3.5 million affordable dwellings, with Egypt, Iraq, Morocco and Saudi Arabia suffering from the biggest shortfalls.

For all the boom (and subsequent busts) in the regional real estate markets, there remains a shortage of a little more than 3.5 million units of affordable housing in the MENA region, according to Jones Lang LaSalle, the real estate consultants.

The largest shortfalls are in the markets of Egypt (1,500,000), Iraq (1,000,000), Morocco (600,000) and Saudi Arabia (400,000), but other Gulf markets also face shortages, brought upon by a host of factors. READ MORE HERE

Saudi Arabia’s housing sector is only just warming up but the profits of listed Saudi companies show the sector’s immense potential. If only the authorities would pass the mortgage law.

Profits of Saudi property managers listed on the Tadawul index rose 30% year-on-year and quarter-on-quarter. Income rose SR465-million in the second quarter, compared to SR347million during the same period last year, buoyed by a surge in real estate loans in the past three quarters, rising 20 to 30% year-on-year. READ MORE HERE

The Saudi Press Agency says the King has approved designs for 15,000 houses:

May 9, 2011- Custodian of the Two Holy Mosques King Abdullah bin Abdulaziz Al Saud reviewed at Al-Yamama Palace here today the designs which he ordered for the units of housing projects all over the regions of the Kingdom totaling 500,000.

The Custodian of the Two Holy Mosques has seen relplicas and maps for the project villas and housing apartments and was briefed by Minister of Housing Dr. Shuwaish bin Saud Al-Dhuwaihi on their sizes, standards and cost of building.

The Custodian of the Two Holy Mosques has also seen an example of 15,000 housing projects units which the General Housing Authority was building, distributed over 25 projects througout the regions of the Kingdom.

The Custodian of the Two Holy Mosques expressed thanks to the Minister and his aides for implementing these projects, emphasizing keenness on rapidness and quality in implementing these projects, saying he will follow- up its phases of implementation.

Following that, the Custodian of the Two Holy Mosques gave his approval to the preliminary designs for the units of housing projects in the various regions of the Kingdom.

While the new housing decrees are set to boost Saudi real estate sector, the on-the-ground reality is that the country’s housing authorities do not have the capacity to build 500,000 homes. Meet the key Saudi players in real estate.
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