Saudi real estate sector expected to boom
The Saudi real estate sector is the next candidate to receive government spending and legislative changes. Previous amendments in the housing sector caused strong movement among investment companies.
Many investment companies are planning to take advantage of the Saudi government’s development plan, which will provide facilities and loans of up to 67 billion dollars to build 500 thousand houses.
Saudi Arabia recently initiated economic reforms to add clarity and provide transparency to its laws and regulations. The aim of these measures is to attract foreign investment, and provide a driving force directly to the real estate sector. Development of the real estate sector is expected to increase GPD by 7.5% by the end of 2011. Over time Saudi Arabia is expected to have one of the most flexible residential real estate markets in the GCC.
According to a study of the Saudi market, the residential real estate market topped the real estate sector, making up more than 70% of total real estate activity. Saudi Arabia faces massive shortages in the number of housing units. The gap in supply and demand is expected to continue in the medium and long term. Real estate prices have witnessed a remarkable growth of around 100% in some key locations, such as Riyadh.
There are approximately 8 million square meters of commercial office space in Saudi Arabia, estimated to increase 25% by 2012. Riyadh is considered to be the main business district in Saudi Arabia, where approximately 50% of commercial office space is located. Despite having the largest area of offices, the supply doesn’t meet the demand for all categories of business.
Religious tourism dominates a wide range of the hospitality services in the country. Religious tourism usually remains immune from economic fluctuations; however the country still plans to support the hospitality sector in the medium and long terms. (Source: www.yallafinance.com)