The head of the Federation’s National Real Estate Committee of Saudi Chambers, Muhammad Al-Murshed, described the real estate sector in the Kingdom as “the second sector that contributes to GDP, and is linked to the growth of over 120 The building and construction activity achieved in the first half of 2021, in 14% increase Compared to last year, the real estate sector recorded a 60% growth in the same period.
Al-Murshid said in exclusive statements to “Al Arabiya.net”that the real estate sector enjoys, like other active economic sectors, the support of Crown Prince Mohammed bin Salman, reviewing what was achieved in 2021 in terms of great movement and projects and initiatives, including The launch of the business of (Roshen Real Estate) Contributing to the development of the housing sector through the development of integrated neighborhoods in in line with the best standard applied in this strategic sector, and the localization of global good practices and technologies, to improve the level of quality of life, and work to meet the growing demand for housing in Saudi Arabia from various segments of society, as well as strengthening strategic partnerships With the private sector and investors, will support and develop the procurement and building materials sector by adopting innovative construction methods and modern technologies in infrastructure construction, as well as focusing on the development and raising of standard in the local sector.
Increase residential spaces
The guide referred to the Crown Prince’s directive to increase thearea of the residential suburb of Al-Gwan from 10 million square meters to 30 million square meters by doubling, and to build additional housing units equal to 53 thousand housing units through projects with integrated structures and services in partnership with the private sector, to be added to the 20,000 housing units A, as part of the interest of the housing sector, which contributes to strengthening the stability of families and increasing the percentage of home ownership.
High real estate GDP
He pointed out that the results of some recent economic studies and analyzes reflect bright prospects for the future of the sector, in it has been shown that the domestic product of the real estate sector at constant prices increased by 0.4% during 2020, reaching 143.2 billion riyals, compared to 142.6 billion riyals in 2019, violating the performance of the Saudi economy, which contracted by 4.1% due to the repercussions of the Corona pandemic that hit the whole world in the last year.
Al-Murshid looked at data from recent reports that showed an increase in the contribution of the real estate sector to the Saudi economy, according to “GDP at constant prices for the year 2010” in the last year 2020 at 5.7%, compared to 5.4% during 2019, where this contribution is considered by the real estate sector in GDP. The total in 2020 is the highest since the base year was also adjusted to 2010 and the share of the real estate sector increased to 9, 6% of the non-oil sector in 2020, compared to 9.3% in 2019.
Moving the real estate landscape
He pointed out that there is another report revealing that the Kingdom’s Vision 2030 led to nearly a trillion dollars in announced real estate and infrastructure projects in all of Saudi Arabia since 2016, indicating that the value and number of mega projects in all of Saudi Arabia is due to transform the real estate landscape and the standard of living in Saudi Arabia.
According to a report and analysis recently conducted by the global real estate consultancy, “Knight Frank”, Saudi Arabia is a reborn country, where the ambition that underpins Vision 2030 is proving itself on the ground, by accessing in A very short time to a trillion US dollars of mega-developments, allocating about $ 300 billion of total spending on new infrastructure is only a third of all planned spending.
On the expectations of the real estate sector in AD 2022, Al-Morshed said: As housing is one of the pillars of Vision 2030, the real estate market in the Kingdom in the coming years will be characterized by a growth in demand for financing contracts supported by new housing, surpassing 1.2 million new loan agreements worth over 600 billion riyals over the 10-year period. in coinciding with the announcement by the Saudi government of several major real estate projects in various regions of the Kingdom, gives optimism for a real estate boom in the Kingdom of Saudi Arabia.
He explained that there is no doubt that Saudi Arabia, in light of the Vision 2030, is witnessing a major transformation in the development of several sectors and economic activities, the most important of which is the real estate sector, as is currently doing. Reign a great effort to reach out and strengthen the non-oil sectors by strengthening the private sector.
2030 and the real estate side
Al-Murshid listed the most important features of the Kingdom vision in the real estate aspect, which is to increase non-oil exports from 16% to 50% of non-oil GDP, increase the value of public investment funds assets to reach 7 trillion riyals and increase the supply of housing units to cover the growing demand, increasing the percentage of Saudis owning their own homes, increasing the efficiency of the healthcare sector and working to increase the life expectancy of Saudis from 74 years to 80 years, the development of infrastructure through various real estate projects, be they residential, commercial, administrative or recreational, as well as the improvement of services and facilities From electricity, water and roads and increasing the capacity of pilgrims from 8 million to 30 million, this will lead to a significant revival of the real estate sector in construction and expansion works, in particularly in the governorate of Mecca Include 85% instead of 70% of the home value to stimulate demand for real estate.
The head of the National Real Estate Committee referred to the statement by the Minister for Municipal and Rural Affairs and Housing that the annual growth in the number of units in the market exceeds 375,000 new housing units and the number of new families entering the market annually the demand is about 100,000 Saudi families in all regions of the Kingdom, stressed that the real estate system has achieved various results, in notably the offer of over 40,000 job opportunities and the increase in private sector participation to over 385 billion riyals, which help strengthen the reliability of the real estate sector in the Kingdom to create an attractive investment environment.
Catalysts for real estate growth or decline in 2022
Al-Murshed said that despite the presence of some challenges for the real estate sector in Saudi Arabia, the drivers for the real estate market’s future look positive in the medium to long term, as the government’s focus on real estate as part of the diversification process of the economy is a great incentive for the real estate market to become more dynamic. , the various urban renewal initiatives, currently in course, should play a vital role in supporting the response to changing demand dynamics, especially as the big boom in the real estate sector has been supported by the Ministry of Housing projects aimed at increasing homeownership citizenship rates to 70%. in 2030, as one of the most important programs of “Kingdom’s Vision 2030”.
He stressed that the real estate sector is linked to multiple factors of sustainable development, which are the most important goals of the Kingdom’s Vision 2030, and has become a vital sector that keeps pace with the economic and social renaissance experienced by Saudi Arabia, for achieve the vision of building a vibrant society, a prosperous economy and an ambitious homeland, and this language of numbers heralds in any promising future for the industry. Real estate for the coming year 2022 AD and until reaching the 2030 vision, due to the high percentage of home ownership of Saudi families, which has been the result of the success of financial and housing solutions in meeting the needs of Saudi families .
It is interesting to note that the percentage of home ownership was 47% in 2016, then increased to 60% by the end of the first phase in the year 2020, and the level of citizen satisfaction with the programs and housing solutions provided is increased, as the percentage was 32% before the start of the housing program, while it reached 80% by the end of 2020, and the contribution of the housing program to GDP also increased, and the contribution of the real estate and housing sectors. construction amounted to the equivalent of 115 billion riyals, during the first period of the program from 2018 to 2020, and non-government (private sector) investment in real estate reached more than 254 billion riyals in 2020.
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