The study observed that the decision to establish a separate Ministry of Housing, as well as the directive of Custodian of the Two Holy Mosques King Abdullah to construct 500,000 housing units and to extend financial support to the Real Estate Development Fund, would make available an adequate number of housing units for citizens. It would also spur the Kingdom’s sustained social and economic growth and development, the study noted.

The study was prepared by Abdul Aziz Al-Ghamdi, a member of the Saudi Engineers Society and one of the directors of Arabian Gulf Society for Management of Projects. Highlighting the significance of constructing more residential units in the Kingdom, Al-Ghamdi said over 60 percent of Saudi citizens are below the age of 25, and that all of them are in need of new housing.

The new Ministry of Housing would be instrumental in working out plans to meet growing demand for housing in accordance with the strategies of the five-year development plans.

“Setting up model suburbs around major cities with a high population growth such as Riyadh, Jeddah and Makkah, would help make all the infrastructure facilities and public utilities available. These suburbs, which can be linked to major cities with ring networks, would ease pressures of massive urban growth, as in the case of major metropolitan cities around the world,” he said.  

Al-Ghamdi called for establishing a higher authority for real estate investments to supervise the real estate market on the pattern of the Capital Market Authority. “The real estate market and the capital market are similar in their performance as two vital economic sectors. The new authority would be instrumental in putting an end to negative trends in the real estate market in the form of speculations and unorganized or undesirable practices,” he said.

The study indicated that the volume of investments to set up new townships and residential buildings is estimated at SR484 billion.

“The Kingdom needs at least 1.5 million housing units to meet the growing demand in the near future. The local banks should be given incentives to play an active role in financially supporting the real estate sector through increased liquidity and extending soft loans to all sections of society,” the study said, while calling on major real estate companies and local banks to cooperate with the government to work out a strategy to help citizens buy residential units.