{"id":14958,"date":"2016-05-31T21:15:15","date_gmt":"2016-05-31T14:15:15","guid":{"rendered":"http:\/\/www.siamlandbank.com\/propertynews\/?p=14958"},"modified":"2016-05-31T19:18:40","modified_gmt":"2016-05-31T12:18:40","slug":"affordable-home-shortage-in-saudi-arabia-likely-to-worsen","status":"publish","type":"post","link":"https:\/\/www.siamlandbank.com\/propertynews\/property-news\/affordable-home-shortage-in-saudi-arabia-likely-to-worsen\/","title":{"rendered":"Affordable home shortage in Saudi Arabia 'likely to worsen'"},"content":{"rendered":"


\nA shortage of “affordable homes” in Saudi Arabia is likely to become more acute as a global lull in oil prices forces the government to cut back on projects.According to property broker Knight Frank, budget cuts prompted by the oil price crash are prompting the country’s Ministry of Housing to scale back its affordable-housing development programme.The ministry has 187 affordable-housing projects in its pipeline, providing 233,651 homes in an attempt to solve the country’s escalating housing crisis.Even before the oil shock, this number falls way short of the estimated national shortfall. Brokers say 400,000 “affordable homes” would be required to satisfy demand from middle-income households earning between 6,000 and 20,000 Saudi riyals a month – two thirds of the population. According to Knight Frank’s 2016 market review, published this week, the ministry is likely to cut back on the development programme as it searches to find extra cash to plug the gap in its finances left by lower revenues from oil.”2016 is expected to see a more selective approach to the development of residential real estate projects,” said Dana Salbak, an associate partner at Knight Frank. “Lower oil prices, reduced market liquidity and a tightening budget are likely to see the re-prioritisation of projects with direct emphasis on the delivery of affordable housing and other critical infrastructure.”The Saudi Arabian government has increased its efforts to build more affordable housing since the Arab Spring in 2011. These include an announcement that it would build 500,000 affordable housing units, the formation of a real estate financing company to improve access to finance and the introduction of a new mortgage law. Despite the plans, brokers say that few homes that are truly affordable for most Saudis have been built. Just 30 per cent of Saudis own their own homes compared with a global average of 70 per cent. Data from the Saudi Real Estate Development Fund reveals that while real estate loans trended up sharply from 2012-2014, the rate of growth slowed throughout last year. Earlier this year the government eased strict new loan-to-value ratios for mortgages that had required buyers to make a 30 per cent down payment in a market where most people cannot afford their own home.According to Knight Frank, average house prices and sales volumes in Saudi Arabia’s three biggest markets – Riyadh, Jeddah and the Eastern Region – continued to slow during the first quarter of the year. The broker said that demand had shifted from sales to rentals as households struggled to come up with deposits. This meant that in Riyadh sales prices remained flat during the first quarter and the number of transactions fell by 10 per cent compared with the same period a year earlier.In April, the broker JLL said that it expected Riyadh house prices to rally about two years after the easing of loan to value ratios. Knight Frank, however, did say that, over the longer term, the country’s recently announced 15-year National Transformation Plan to further diversify the economy would have a positive effect on the housing market. It also praised the country’s new white land tax, which aims to reduce property speculation by penalising owners of vacant land in urban areas who do not develop it. lbarnard@thenational.ae Follow The National’s Business section on Twitter
\n
\nSource : thenational.ae
\nRead more…Affordable home shortage in Saudi Arabia ‘likely to worsen’<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"

A shortage of “affordable homes” in Saudi Arabia is likely to become more acute as...<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"false","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"spay_email":"","footnotes":"","jetpack_publicize_message":"","jetpack_is_tweetstorm":false,"jetpack_publicize_feature_enabled":true},"categories":[1],"tags":[],"class_list":["post-14958","post","type-post","status-publish","format-standard","hentry","category-property-news"],"jetpack_featured_media_url":"","jetpack_publicize_connections":[],"jetpack_sharing_enabled":true,"jetpack_shortlink":"https:\/\/wp.me\/p75ss1-3Tg","jetpack-related-posts":[{"id":16518,"url":"https:\/\/www.siamlandbank.com\/propertynews\/property-news\/saudi-arabian-cabinet-approves-land-tax-foreign-investment-rules\/","url_meta":{"origin":14958,"position":0},"title":"Saudi Arabian cabinet approves land tax, foreign investment rules","date":"June 14, 2016","format":false,"excerpt":"\r The Saudi Arabian cabinet has approved the fine print of a controversial new tax on undeveloped land aimed at making it more expensive for owners of urban land to keep it empty.Under the new \"White Land\" tax that was approved on Tuesday, owners of empty plots of urban land\u2026","rel":"","context":"In "Property News"","img":{"alt_text":"","src":"","width":0,"height":0},"classes":[]},{"id":15898,"url":"https:\/\/www.siamlandbank.com\/propertynews\/property-news\/kingdoms-transformation-plan-aims-to-lift-property-ownership-among-saudis\/","url_meta":{"origin":14958,"position":1},"title":"Kingdom's transformation plan aims to lift property ownership among Saudis","date":"June 8, 2016","format":false,"excerpt":"\r The Saudi Arabian government is proposing a raft of measures aimed at boosting the country's undersupplied housing market as part of its National Transformation Plan.This week Saudi Arabian officials started to flesh out the plan aimed at reducing the country's reliance on oil revenue following the 2014 oil price\u2026","rel":"","context":"In "Property News"","img":{"alt_text":"","src":"","width":0,"height":0},"classes":[]},{"id":11756,"url":"https:\/\/www.siamlandbank.com\/propertynews\/property-news\/saudi-arabia-to-provide-housing-to-100000-low-income-families\/","url_meta":{"origin":14958,"position":2},"title":"Saudi Arabia to provide housing to 100,000 low-income families","date":"May 1, 2016","format":false,"excerpt":"\r Saudi Arabia's government will provide housing for 100,000 low-income families over the next year as part of a reform programme designed to strengthen the economy and reduce its dependence on oil, the housing ministry said on Sunday.The announcement suggests authorities are keen to show swiftly that the reform plan,\u2026","rel":"","context":"In "Property News"","img":{"alt_text":"","src":"","width":0,"height":0},"classes":[]},{"id":25069,"url":"https:\/\/www.siamlandbank.com\/propertynews\/property-news\/riyadh-rents-increase-as-population-growth-outpaces-available-homes\/","url_meta":{"origin":14958,"position":3},"title":"Riyadh rents increase as population growth outpaces available homes","date":"September 5, 2016","format":false,"excerpt":"\r Annual rents in Saudi Arabia's capital Riyadh have risen to an average of26,935 Saudi riyals (Dh26,377) as the city's population has grown far quicker than the number of new homes built.According to property broker Chestertons, which has opened its first offices in Saudi Arabia with Saudi partner Medad Valuation\u2026","rel":"","context":"In "Property 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News"","img":{"alt_text":"","src":"","width":0,"height":0},"classes":[]},{"id":29265,"url":"https:\/\/www.siamlandbank.com\/propertynews\/property-news\/uncertainty-hovers-over-saudi-arabia-residential-property-market\/","url_meta":{"origin":14958,"position":5},"title":"Uncertainty hovers over Saudi Arabia residential property market","date":"October 9, 2016","format":false,"excerpt":"\r House prices in Saudi Arabia will stutter over the coming year as investors and lenders wait out the effects of economic uncertainty and new government reforms on the kingdom's residential property market.Analysts at the Jeddah asset management and investment firm Alkhabeer Capital said that in the near term rental\u2026","rel":"","context":"In "Property 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