RIYADH, 22 August — The Riyadh Development Authority has estimated that there needs to be massive investment to revamp the city’s housing sector. The figure is put at more than SR1 trillion over the next 20 years.
“The housing sector in Riyadh will need a financial investment of SR55 billion every year over the next 20 years,” reported Abdullatif Al-Sheikh, head of the RDA’s projects and planning center.
According to a study conducted by the authority, Riyadh’s population increases by 32 percent annually. This population explosion, which has necessitated the huge housing investment, was largely due to the growing migration of Saudis from rural areas.
Saad ibn Abdul Rahman Al-Rashid, director-general of the Abdul Rahman Al-Rashid Group, which is engaged in construction projects, emphasized the need to change construction policies in the city to accommodate the growing number of people.
According to one estimate, Riyadh’s population will hit eight million by 2010 and the city will require 1.5 million extra housing units during the next 20 years.
The Central Department of Statistics at the Ministry of Planning carried out a Demographic Sample Survey which showed that the total indigenous population of Saudi Arabia went up from 16.95 million in 1992 to 19.90 million in 1999. The average annual growth rate of the total population was 2.5 percent between 1992 and 1999, compared to 3.5 percent for the decade prior to 1992.
The housing sector offers lucrative investment opportunities to businessmen, banks and financial institutions.
“We have seen that this is a good area for investment,” Al-Rashid told Arab News. He underscored his company’s desire to establish world-class residential and commercial complexes.
Al-Rashid group has already allocated SR100 million to construct new housing projects. He said Riyadh required large housing projects due to an increase in demand.
“The rate of vacant housing units in Riyadh is around five percent, which is really very promising.”
He added that “there is good scope for constructing small villas, as many young Saudis prefer to purchase them after they get married, and the successful marketing of such housing units will of course depend on the quality of construction. This means introducing new building techniques like heat insulation, which help house owners save money on electricity bills.”
