Saudi Arabia to see up to $21bn investment in housing this year

Saudi Arabia’s Ministry of Housing wants 60 percent of Saudis to own homes by 2020. Above, a newly-constructed residential area in Dammam. (Shutterstock)
Updated 08 March 2019
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Saudi Arabia to see up to $21bn investment in housing this year

  • Home ownership growing 6-7% annually, says Minister of Housing Majed Al-Hogail
  • Minister hopes to raise home ownership to 15,000 new households per month by 2020

RIYADH: Saudi Arabia’s housing minister said on Wednesday he expects investments in the real estate financing sector to reach between SR60 billion and SR80 billion ($21.33 billion) in 2019.

Real estate financing for January hit SR4.7 billion, and coming months were expected to see even bigger figures, Majed Al-Hogail told Reuters on the sidelines of a housing conference in Riyadh.

The ministry wants 60 percent of Saudis to own homes by 2020. It is working with local banks to facilitate financing and help developers increase the supply of affordable units.

The private sector is now financing 100 percent of housing market needs, up from 35 percent previously, the minister said on stage at the conference. He said banks provide 93 percent of real estate financing, with real estate financing firms covering the rest.

Saudi home ownership is growing between 6 and 7 percent annually, Al-Hogail said.

He also said he hopes to raise home ownership to 15,000 new households per month by 2020, from a little over 10,000 per month now.

“The average supply of housing units in the Saudi real estate market is between 350 to 375 thousand units across the Kingdom,” he told Reuters. Ninety thousand families access the market yearly, he said, and the government hopes to raise the percentage of home ownership by 7 percent annually.

The Saudi government wants to increase activity in the real estate market as it moves to revitalize the economy, and is taking steps to reform the sector as part of its Vision 2030 strategic plan.


Boeing abandons 2019 outlook after 737 MAX aircraft groundings

Updated 24 April 2019
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Boeing abandons 2019 outlook after 737 MAX aircraft groundings

  • Boeing’s core earnings fell to $1.99 billion, or $3.16 per share
  • The planemaker said it faced $1 billion in increased costs in the first-quarter ended March 31

Boeing missed sharply-lowered Wall Street estimates for revenue and cashflow in the first quarter and suspended its 2019 outlook, as the world’s largest planemaker continued to suffer from the grounding of its 737 MAX jets.

The company said it faced $1 billion in increased costs in the first-quarter ended March 31, related to the 737 aircraft as it halted deliveries of the grounded planes to customers around the globe.

The company also said it was halting share buybacks.

The fallout of a second deadly crash within months in March has seen Boeing cut production of the jets to 42 aircraft per month, down from 52, and its operating cash flow in the first quarter was around $350 million lower than a year earlier.

Boeing is also spending on developing a fix for an anti-stall software known by the acronym MCAS, which has been a common link in the separate chains of events leading to the two crashes within a span of five months.

The company said it would be issuing a new forecast in the future when it has more clarity around the issues surrounding the 737 MAX.

First-quarter operating cash flow declined to $2.79 billion, from $3.14 billion, missing the Wall Street’s average estimate of $2.82 billion.

Revenue fell 2 percent to $22.92 billion, below analysts’ average estimate of $22.98 billion.

Excluding certain items, Boeing said its core earnings fell to $3.16 per share, in the quarter from $3.64 per share, a year earlier. Analysts had expected Boeing to earn $3.16 per share.