The Cabinet's approval for setting up a Saudi Authority for Accredited Evaluators on Monday will have a positive impact on the local real estate market, observed a senior official yesterday from the Council of Saudi Chambers in Riyadh.
On Monday, the Council of Ministers approved the accredited evaluators law and the establishment of the authority at its weekly meeting held in Jeddah.
According to the Cabinet decision, the proposed authority will be chaired by the minister of commerce and industry. The board of management will have six professional evaluators appointed by the minister.
The new law will regulate real estate evaluations, economic institutions, equipment and properties.
Council of Saudi Chambers President Abdullah Al-Mobti said yesterday that the decision would give a big boost to the real estate market and also help consolidate real estate assets in the Kingdom.
Implementation of this program would not only improve real estate business in the Kingdom but will also pave the way for the development of the country's economy, he noted, adding that it would also increase investor confidence in the real estate market.
Al-Mobti said this has been a long felt need of the market. “This was a timely action when real estate entrepreneurs were looking for firm real estate regulations in the Kingdom.” He also thanked the authorities for providing an opportunity for active participation in the functions of the authority.
The Council of Saudi Chambers recently forwarded a report on the study calling for the establishment of an authority for real estate to the Shoura Council for review. According to the report, the council agreed on the concept of the authority but the details of its role and its functions would need to be worked out by a consultancy firm.
The recommendations were made in the light of the latest developments in the real estate sector such as the setting up of a separate ministry for housing, supplementary allocations offered through royal decrees to the Real Estate Development Fund and the interest shown by private investors in real estate financing.
Such an authority, the report said, would attend to the needs of landowners, consumers and local and foreign investors.
According to an official from the council, such an authority could frame regulations for the fast developing real estate sector and be a window for the real estate industry in the Kingdom for both local and international markets.
It could also reduce the workload on governmental bodies such as ministries of justice, municipal and rural affairs and commerce and industry and finance and the Saudi Arabia Monetary Agency, he added.
The council’s National Real Estate Council was entrusted with the task of formulating the regulation for the real estate industry, promoting investments for the real estate sector in the Kingdom, recruiting professionals for the trade and trying to promote the right picture of the real estate industry to investors as well as the consumers.
Recently, the Shoura Council approved the draft state mortgage law. According to a recent study, the Kingdom needs 300,000 residential units every year over the next 15 years, a total of 4.5 million. In Riyadh, the lack of affordable homes is especially acute — a shortage of 225,000 residential units.
Established by a royal decree Real Estate Development Fund (REDF) started its activities at the beginning of 1975 to provide loans to citizens to help them construct their own homes and for investment purposes. It commenced operations with a capital of SR 250 million.
During the first 25 years from its inception, REDF has granted 443,842 private loans as well as 2,488 investment loans, resulting in the construction of 555,866 residential units. REDF's services have so far reached 3,976 cities, villages and remote areas all over the Kingdom.
