{"id":2090,"date":"2016-01-21T01:00:41","date_gmt":"2016-01-20T18:00:41","guid":{"rendered":"http:\/\/www.siamlandbank.com\/propertynews\/?p=2090"},"modified":"2016-01-20T22:37:25","modified_gmt":"2016-01-20T15:37:25","slug":"shortage-of-saudi-homes-provides-scope-for-developers","status":"publish","type":"post","link":"https:\/\/www.siamlandbank.com\/propertynews\/property-news\/shortage-of-saudi-homes-provides-scope-for-developers\/","title":{"rendered":"Shortage of Saudi homes provides scope for developers"},"content":{"rendered":"


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\nA shortage of homes avail\u00adable for Saudi Arabia\u2019s rapidly growing population means that there are opportunities for developers, despite the slowing economy.Several UAE developers and contractors have expanded in the kingdom in recent years, and although it is not always the easiest place to work, most remain positive about its prospects. Abu Dhabi-based Gulf Related, for example, is to complete the first of two proposed 1 billion Saudi riyal (Dh979 million) residential schemes in Riyadh in October. The 522-unit Anantara residential community is within a secure compound offering many amenities at mainly expat renters.
\nEmile Habib, the managing director, said that although the number of new workers coming into Riyadh has slowed, there is plenty of demand from other sources.\u201cOne is people living in existing compounds who want to upgrade, because many are outdated. The other is from people who have applied to get into compounds. Waiting lists are still running at six to 12 months.\u201cThere is still a shortfall of thousands of units. That\u2019s a general theme all over Riyadh. The demand for residential is massive.\u201d
\nYear-on-year rents for apartments in Riyadh were up by 8 per cent and villas by 6 per cent in the third quarter of last year, according to JLL. Sale prices actually fell (by 5 per cent and 1 per cent respectively), but this was blamed on a government move in November 2014 to cap loan-to-value ratios on mortgages. Buyers have to come up with a 30 per cent down payment in a market where most people cannot afford their own home.
\nA JLL report on affordable housing published in September stated that there is a shortfall of about 400,000 affordable units across the country, and that just 30 per cent of Saudis own their own homes (compared with a global average of 70 per cent). Hardly any parts of either Riyadh or Jeddah had homes deemed \u201caffordable\u201d for middle-income families \u2013 households earning between 6,000 and 20,000 riyals per month, or 62 per cent of the population.
\nIt is an issue that the government has been attempting to tackle for years. The main obstacle is the high cost of land, which has been exacerbated in recent years by speculative traders. A \u201cwhite land tax\u201d in undeveloped land was announced in October and will come into force in June to prevent owners sitting on land, with the levy recycled into affordable schemes.Bilal Siddiqui, a development solutions manager for Colliers in Riyadh, said the tax is already having an effect.
\n\u201cEverybody is expecting land prices to go down. And if you\u2019re selling at a lower price, that reduces the viability of just selling land. It forces you to think about other ways of increasing the overall development value.\u201dOmar Al Kadi, the chief executive of Riyadh-based Injaz Development, said banks are also becoming more cautious in lending to the sector. \u201cThe caution is now even for a single plot. This is not just because of the tax. People are trying to see if prices will go down. The tension also in the region \u2013 it\u2019s making people more careful of spending and investing.\u201d
\nHe sees more of the country\u2019s big contracting groups moving into development \u2013 partly to serve the need for more afford\u00adable housing but also to make up for a decline in construction workload \u2013 and advises developers to differentiate by concentrating on the luxury market. Most UAE developers are already doing this. Damac\u2019s senior vice president, Niall McLoughlin, said sales of luxury flats in two tower schemes in Riyadh \u201cwere very positive last year. We believe that this year will be no exception\u201d.
\nA spokesman for Emaar Middle East, which is building master planned communities in Jeddah and Khobar, said that it would \u201c continue to explore new growth opportunities in the kingdom, given the gap in housing and the continued demand.\u201cThe government\u2019s focus on strengthening the role of the private sector provides a strong opportunity for new real estate ventures. Following the recent announcement by the leadership, more land is expected to be opened up for development.\u201d
\nEmaar Middle East also said recommendations for a new real estate regulatory authority and for strengthening Islamic mortgages could also help its growth.Craig Plumb, the head of research for JLL Mena, said that other UAE developers are likely to be tempted into the country as their home market slows.\u201cDue to the size of the market there are lots of clear opportunities of scale,\u201d he said. \u201cHowever, what is also becoming clearer is that there are challenges as well. It is not entirely clear just how opportunities such as the white land tax and the affordable housing requirements will play out. If it was such a great opportunity then everybody would be over there making money.\u201d
\nmfahy@thenational.aelbarnard@thenational.aeFollow The National\u2019s Business section on Twitter
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\nSource : thenational.ae
\nRead more…Shortage of Saudi homes provides scope for developers<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"

A shortage of homes avail\u00adable for Saudi Arabia\u2019s rapidly growing population means that there...<\/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-2090","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-xI","jetpack-related-posts":[{"id":145852,"url":"https:\/\/www.siamlandbank.com\/propertynews\/property-news\/saudi-real-estate-shortage-what-will-it-take-to-drive-down-riyadh-construction-costs\/","url_meta":{"origin":2090,"position":0},"title":"Saudi real estate shortage: What will it take to drive down Riyadh construction costs?","date":"July 4, 2024","format":false,"excerpt":"\r Saudi Arabia's giga-projects are pricing out real estate developers as construction costs skyrocket and exacerbate the supply crunch for housing and office spaces in Riyadh, expert says\r \r Source : arabianbusiness.com\r Read more...Saudi real estate shortage: What will it take to drive down Riyadh construction costs?","rel":"","context":"In "Property News"","img":{"alt_text":"","src":"https:\/\/i1.wp.com\/www.siamlandbank.com\/propertynews\/wp-content\/uploads\/2024\/07\/Riyadh-KAFD-1000x667-1.jpg?fit=1000%2C667&ssl=1&resize=350%2C200","width":350,"height":200},"classes":[]},{"id":10306,"url":"https:\/\/www.siamlandbank.com\/propertynews\/property-news\/uae-developers-eagerly-anticipate-formation-of-saudi-housing-company\/","url_meta":{"origin":2090,"position":1},"title":"UAE developers eagerly anticipate formation of Saudi housing company","date":"April 9, 2016","format":false,"excerpt":"\r \r The revelation by Saudi Arabia that it will launch a state-backed development company in a bid to ease its housing shortage has sparked the interest of UAE developers. Saudi Arabia's housing minister, Majed Al Hogail, told Bloomberg it would create a development company that will give businesses plots\u2026","rel":"","context":"In "Property News"","img":{"alt_text":"","src":"","width":0,"height":0},"classes":[]},{"id":7482,"url":"https:\/\/www.siamlandbank.com\/propertynews\/property-news\/nakheel-to-advise-major-saudi-property-developer-on-new-schemes\/","url_meta":{"origin":2090,"position":2},"title":"Nakheel to advise major Saudi property developer on new schemes","date":"March 11, 2016","format":false,"excerpt":"\r \r Dubai-based developer Nakheel has signed an agreement with one of Saudi Arabia's biggest quoted property developers, Saudi Real Estate, to advise it on projects in the kingdom.The agreement, which will run initially for one year, involves Nakheel providing technical support and advice to Saudi Real Estate, also known\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":2090,"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 News"","img":{"alt_text":"","src":"","width":0,"height":0},"classes":[]},{"id":32439,"url":"https:\/\/www.siamlandbank.com\/propertynews\/property-news\/saudi-market-regulator-opens-field-for-reits\/","url_meta":{"origin":2090,"position":4},"title":"Saudi market regulator opens field for Reits","date":"November 1, 2016","format":false,"excerpt":"\r The creation of Real Estate Investment Trusts (Reits) in Saudi Arabia will open up the property market to smaller investors and support government efforts to resolve a housing shortage, experts said on Monday.The Capital Markets Authority (CMA) has put in place a new set of rules allowing for the\u2026","rel":"","context":"In "Property News"","img":{"alt_text":"","src":"","width":0,"height":0},"classes":[]},{"id":32443,"url":"https:\/\/www.siamlandbank.com\/propertynews\/property-news\/saudi-market-regulator-opens-field-for-reits-2\/","url_meta":{"origin":2090,"position":5},"title":"Saudi market regulator opens field for Reits","date":"November 1, 2016","format":false,"excerpt":"\r The creation of Real Estate Investment Trusts (Reits) in Saudi Arabia will open up the property market to smaller investors and support government efforts to resolve a housing shortage, experts said on Monday.The Capital Markets Authority (CMA) has put in place a new set of rules allowing for the\u2026","rel":"","context":"In "Property News"","img":{"alt_text":"","src":"","width":0,"height":0},"classes":[]}],"_links":{"self":[{"href":"https:\/\/www.siamlandbank.com\/propertynews\/wp-json\/wp\/v2\/posts\/2090"}],"collection":[{"href":"https:\/\/www.siamlandbank.com\/propertynews\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.siamlandbank.com\/propertynews\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.siamlandbank.com\/propertynews\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.siamlandbank.com\/propertynews\/wp-json\/wp\/v2\/comments?post=2090"}],"version-history":[{"count":0,"href":"https:\/\/www.siamlandbank.com\/propertynews\/wp-json\/wp\/v2\/posts\/2090\/revisions"}],"wp:attachment":[{"href":"https:\/\/www.siamlandbank.com\/propertynews\/wp-json\/wp\/v2\/media?parent=2090"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.siamlandbank.com\/propertynews\/wp-json\/wp\/v2\/categories?post=2090"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.siamlandbank.com\/propertynews\/wp-json\/wp\/v2\/tags?post=2090"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}