Saudi Arabia’s first mortgage law could boost housing demand by 50 per cent
The Kingdom of Saudi Arabia is set to enact a new mortgage law within the next few months which has the potential to increase housing demand by as much as 50 per cent. The upcoming set of legislation will especially boost the under-served low- and middle-income markets by clearly outlining mortgage policies and introducing more mortgage options as well as allowing banks to further diversify their portfolios by engaging in property investments.
“Unlike other Gulf states, Saudi Arabia’s real estate sector is not undergoing market correction as its housing demand remains very high. Jeddah alone has already rolled out a strategic plan to build almost a million units by 2030 to cope with rural migration and an expanding expatriate population. There is still so much room for growth and the new mortgage law will add much-needed order as the low- and middle-income sectors begin to gain more buying confidence,” said Deep Marwaha, Event Director of Cityscape Saudi Arabia.
Under the Patronage of HRH Prince Misha’al Bin Majed Bin Abdul Aziz, Governor of Jeddah, Cityscape Jeddah 2010 is Endorsed by the Ministry of Commerce and Industry and Supported by the Jeddah Chamber of Commerce and Industry. Cityscape Jeddah is the Kingdom's premier real estate investment & development event taking place from 7 to 9 June 2010 at the JeddahCenter for Forums and Events and will introduce regional
and international developers and investors to existing and potential property developments within the Saudi real estate sector. A focal point of the event is the 2nd annual Saudi Arabia Real Estate Investment and Development Conference, which will be held under the theme ‘Transparency, Investment Models and Future Partnerships.’
“Initiatives such as the mortgage law are crucial for potential homeowners to make better choices and for industry players to properly plan for growth in this thriving market. Moreover, it is essential that a solid regulatory framework be put in place so that industry movements align well with the government’s broader development agenda,” said a speaker at the conference.
Mortgage lending currently accounts for only 2 per cent of the Kingdom’s GDP, and yet only 35 per cent of Saudi nationals own their homes. The new law, which many analysts believe will trigger the country’s second housing boom, complements real estate’s emergence as one of Saudi Arabia’s strongest and most reliable revenue generators. Around 47 per cent of local businessmen agree that property is currently the most lucrative market in the country.
“The Kingdom needs to enhance the way it finances housing purchases and how it uses financial instruments for such transactions if it wants to sustain its leadership in the regional property business. The mortgage law is an important step in broadening opportunities for buyers, investors and developers and establishing the country as a top real estate hub,” added Mr. Ayedh Al-Qahtani, Chairman, Sumou Real Estate.
A distinguished lineup of conference speakers include Fahad Bin Saleh Al Sultan, Secretary General of the Council of Saudi Chambers; Dr. Abdulgader Amir, Former Vice Mayor of Jeddah and Vice President of Jeddah Development and Urban
Regeneration Company; Ayedh Al-Qahtani, Chairman of Sumou Real Estate; Ahmed Al-Khateeb, Managing Director and CEO of Jadwa Investment; Humphrey Percy, Chief Executive Officer and Executive Director, Bank of London and The Middle East; Diab Chidiac, Director of Real Estate, Shuaa Capital, among others.