Housing assuming serious dimensions?

Housing continues to be a serious issue and the Kingdom's focus of attention.
What is complicating the problem is that the Kingdom's population is maintaining one of the highest growth rates.
While there is continuous demand for housing from the citizens, especially young citizens who are looking for their own homes, the tremendous influx of workers from abroad is also adding to the pressure on accommodation.
The construction boom continues alongside work on some of the Kingdom's mega projects necessitating hiring of workers from overseas destinations. So, the demand from the citizens and also the influx of expatriates is adding pressure on the housing front; the demand for accommodation continues to rise.
The Kingdom's economy is stable, thanks to its envious record of buoyancy. Young Saudis are getting into employment or embarking on their own ventures and entering the marriage age.
Even as this is happening, certain lifestyle changes are taking place, especially in terms of family size. Joint families are slowly and steadily giving way to nuclear families. This trend has also put pressure on the demand for houses. It's time efforts are intensified to meet the housing demand. The track record shows the problem continues to defy solution.
In the recent past, it has accentuated the problem. It is also complicated by the fact that the cost of housing and land is rising while income not necessarily increasing at the same level.
So, affordability is becoming an issue here. On average 180,000 to 200,000 housing units are needed yearly. In the main cities of Riyadh, Jeddah and Dammam, the cost of land accounts for nearly 50 to 60 percent of the house cost.
The cost of a house compared to the average annual income is nearly nine folds. In the United States and some of the developed economies it is between three and five folds.
The mortgage law will certainly help to deal with this problem. But it will help only certain segments of population given the cost of housing units and average level of income.
Which means many Saudis will not necessarily be able to obtain the appropriate or necessary funding to own their houses. Middle to high income people may benefit from the mortgage law but certainly not the middle to low segment.
If you look at Riyadh and Jeddah, the average cost of a house is nearly SR1.5 million, and an apartment between SR700,000 and SR1 million. This is about 9 times the annual income.
The Ministry of Housing is working on a strategy for housing but it has not yet finalized it.
It looks that the issue of housing shortage will be there for some time to come. This is because demand is outpacing supply. So, there is a need to improve the supply part on a war footing.

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