RIYADH, 17 January 2007 — The housing market in the Kingdom will be molded by demands from the new generation of middle-class Saudis rather than led by investment, Dr. John Sfakianakis, chief economist of SABB told delegates to the Euromoney Saudi Arabia Housing Finance Conference here yesterday.
“We are now witnessing a growing demand from young, middle-income Saudis,” Dr. Sfakianakis said in an address to the conference. “If we are to meet that demand, Saudi Arabia will need to build 1.5 million new homes by 2015, and it will be up to the financial institutions in the private sector to provide the finance that makes this huge expansion possible.”
SABB’s managing director, John Coverdale, observed that the banking sector in particular would need to introduce innovative financial solutions which will, on the one hand, enable developers to build these homes, and, on the other, ensure that Saudis are financially able to buy them.
“We need to create opportunities for young Saudis to get on the “housing ladder” and to trade up as their incomes increase.”
The conference, partnering Euromoney, the King Abdullah Foundation for Social Housing and the International Finance Corporation, and sponsored by SABB, has brought together delegates from government ministries and agencies.
“It has proved most valuable in raising the issues that vitally needed to be discussed while also demonstrating that there is a definite will among the Kingdom’s financial institutions to solve those issues,” Coverdale commented. “Coupled with the government’s policy concerning low-cost housing, we are optimistic about the future for home ownership in Saudi Arabia,” he said.