Nearly half of people living in Saudi Arabia do not save anything, survey finds

Updated 13 April 2018
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Nearly half of people living in Saudi Arabia do not save anything, survey finds

  • Nearly half of all people living in Saudi Arabia have no savings
  • Just 17% of people in the Kingdom have saved less than 5% of their income

JEDDAH: Some 45 per cent of people living in Saudi Arabia do not save any money at all out of their monthly income, according to a new survey of attitudes towards saving and investment among residents in the Kingdom.

The survey, conducted by the Jeddah based wealth management firm SEDCO Holdings and Dubai-based online finance group Souqamal.com, found that most respondents blamed a low level of income for their failure to put money aside.

It also found that only a further 17 percent saved less than 5 percent, while 38 percent saved more than 6 percent.

The results come as the Ministry of Housing is asking Saudis to save for a deposit on their future home. It finds a lack of a savings culture that makes this goal difficult.

Amr Banaja, a SEDCO executive, said: “Anyone should be able to achieve what they aspire for financial without resorting to borrowing or depriving themselves of what they desire. One can do this by properly managing their finances, shunning needless expense, and choosing appropriate saving and investment opportunities.”

When asked about the reason behind their failure to respond, 60 percent said their level of income prevented it. Since 2014, official statistics show that the average levels of income have risen by 13 percent in the private sector, and 6 percent in government employment, the survey compilers said.

The survey raises the question of whether the cost of living in the Kingdom has risen faster than salaries. According to official figures inflation rose by 7.6 percent between 2014 and 2016. It fell to near zero last year, but jumped again at the beginning of this year, with the introduction of value added tax.

The last official figures showed consumer prices rose 2.7 percent in February, marginally down from the 3 percent of January.

The survey also found that 83 percent of respondents have no long term investment plans, showing a lack of awareness of investment techniques and practices.

Ambareen Musa, founder and CEO of Souqamal, said: “Saving and investment should go hand in hand. Start with a monthly budget and figure out what your basic necessities are that you can save every month.”

SEDCO has launched the Riyali financial literacy program to make people aware of the basics of investment.

The survey was conducted among 2,000 respondents, which included Saudi citizens and expatriates, in line with the Kingdom’s demographics.


Dubai property developer Damac on hunt for land in Saudi Arabia

Hussain Sajwani
Updated 18 March 2019
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Dubai property developer Damac on hunt for land in Saudi Arabia

  • Brexit a “concern” for UK property market says Sajwani
  • Developer mulls investing “up to £500 million” on London project

LONDON: The Dubai-listed developer Damac says it is scouting for additional plots of land in Saudi Arabia, both in established cities and the Kingdom’s emerging giga-projects such as Neom.
Hussain Sajwani, chairman of Damac Properties, also said the company would look to invest up to £500 million ($660 million) on a second development in the UK, and that it is on track to deliver a record 7,000 or more units this year.
Amid a slowing property market in Dubai, Damac’s base, the developer is eying Saudi Arabia as a potential ground for expansion for its high-spec residential projects.
Damac has one development in Jeddah, and a twin-tower project in Riyadh — and Sajwani said it is looking for additional plots in the Kingdom.
“It’s a big market. It is changing, it is opening up, so we see a potential there … We are looking,” he said.
“In the Middle East, Saudi Arabia is the biggest economy … They have some very ambitious projects, like the Neom city and other large projects. We’re watching those and studying them very carefully.”
The $500 billion Neom project, which was announced in 2017, is set to be a huge economic zone with residential, commercial and tourist facilities on the Red Sea coast.
Sajwani said doing business in Saudi Arabia was “a bit more difficult or complicated” that the UAE, but said the country is opening up, citing moves to allow women to drive and reopen cinemas.
He was speaking to Arab News in Damac’s London sales office, opposite the Harrods department store in Knightsbridge. The office, kitted out in plush Versace furnishings, is selling units at Damac’s first development in the UK, the Damac Tower Nine Elms London.
The 50-storey development is in a new urban district south of the River Thames, which is also home to the US Embassy and the famous Battersea Power Station, which is being redeveloped as a residential and commercial property.
Work on Damac's tower is underway and is due to complete in late 2020 or early 2021, Sajwani said.
“We have sold more than 60 percent of the project,” he said. “It’s very mixed, we have (buyers) from the UK, from Asia, the Middle East.”
Damac’s first London project was launched in 2015, the year before the referendum on the UK exiting the EU — the result of which has had a knock-on effect on the London property market.
“Definitely Brexit has cause a lot of concern, people are not clear where the situation will go. Overall, the market has suffered because of Brexit,” Sajwani said.
“It’s going to be difficult for the coming two years at least … unless (the UK decides) to stay in the EU.”
Despite the ongoing uncertainty over Brexit, Sajwani said Damac was looking for additional plots of land in London, both in the “golden triangle” — the pricey areas of Mayfair, Belgravia and Knightsbridge, which are popular with Gulf investors — and new residential districts like Nine Elms.
Sajwani is considering an investment of “up to £500 million” on a new project in the UK capital.
“We are looking aggressively, and spending a lot of time … finding other opportunities,” he said. “Our appetite for London is there.”
Damac is also considering other international property markets for expansion, including parts of Europe and North American cities like Toronto, Boston, New York and Miami, Sajwani said.
The international drive by Damac comes, however, amid a tough property market in the developer’s home market of Dubai.
Damac in February reported that its 2018 profits fell by nearly 60 percent, with its fourth-quarter profit tumbling by 87 percent, according to Reuters calculations.
Sajwani — whose company attracted headlines for its partnership with the Trump Organization for two golf courses in Dubai — does not see any immediate recovery in the emirate’s property market, or Damac’s financial results.
“(With) the market being soft, prices being under pressure, we are part of the market — we are not going to do better than last year,” he said. “This year and next year are going to be difficult years. But it’s a great opportunity for the buyers.”
But the developer said Dubai was “very strong fundamentally,” citing factors like its advanced infrastructure, safety and security, and low taxes.
In 2018, Damac delivered over 4,100 units — a record for the company — and this year, despite the difficult market, it plans to hand over even more.
“We’re expecting north of 7,000,” Sajwani said. “This year will be another record.”