100,000 homes planned for Saudi citizens by 2020

This still image from a video posted on the Saudi Housing Ministry website shows a housing project for Saudi citizens under the ministry's Sakani program.
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Updated 15 December 2019

100,000 homes planned for Saudi citizens by 2020

  • 19 projects in nine regions of the Kingdom have been announced

JEDDAH: Real estate professionals have praised the efforts of the Saudi Ministry of Housing after it announced the launch of several housing units in the Kingdom.

Abdullah Al-Ahmari, head of the committee for evaluating real estate, and experts in construction at the Jeddah Chamber of Commerce and Industry (JCCI) said that the ministry was working fast to establish housing units in cooperation with local developers. The aim is to provide different options for people who need housing support and to achieve the ministry's 2020 goals.

The question Al-Ahmari asked is: “Do these housing projects satisfy the needs and aspiration of citizens?” He added that they should provide facilities and services such as education, health and infrastructure. Al-Ahmari said that there should be a balance in the real estate market so that the value of housing units provided by the ministry should not be less than that of those preferred by local banks due to long installment times.

Ahmed Al-Bar, from the Al-Bar Group for Real Estate Development, and a former member of the real state committee at JCCI, said: “The minister of housing has proven successful, but I hope that the Ministry of Housing will ensure that planning for housing units include services that people need, including hospitals, schools, parks, malls and nurseries.”

There were housing projects in Egypt, Ethiopia and China that could be considered as models for the Kingdom. “We hope that cooperation is achieved between planners, contractors and supervisors to develop projects that best serve residents, and models that provide services side by side with housing units,” he said.

The ministry has announced its goals for 2020, including providing 100,000 new housing units in partnership with real estate developers at a total value of SR65 billion.

Its “Sakani” program continues to deliver housing units, and 19 projects in nine regions of the Kingdom have been announced — 40 projects are providing 14,000 “villa” housing units. These projects are characterized by infrastructure such as sidewalks, lighting, electricity and water services, in addition to green areas, public parks and children’s playgrounds and mosques.

Saif Al-Suwailem, spokesperson for the Ministry of Housing, affirmed the department's keenness to deliver units to citizens as soon as they are completed. The ministry ensured the housing units met all quality standards and specifications. The aim was to achieve the goals of the housing program — to increase local ownership to reach 70 percent as part of Saudi 2030 Vision goals, he said. 

Free land
The ministry allocated 12,642 plots for residential property building during November, according to official figures.

Makkah received the largest issue of free land under the ministry’s “Sakani” program at 2,383, with Qassim second on 2,079 and Najran on 1,660.

A statement from program officials said that the figures for land distribution in preparation for the construction of housing units were made possible by electronic streamlining of the application process.

Other parts of the Kingdom to receive land allocations were Riyadh (1,611), the Eastern Region (1,362), Madinah (998), Al-Jouf (513), Northern Borders (319), Hail (651), Asir (504), Tabuk (255), Al-Baha (221) and Jazan (86).

Free land is one of the options provided by the program. Beneficiaries may also apply for villas, buy an under-construction residential unit in partnership with the private sector, buy a finished housing unit off the market or acquire a 100 percent subsidized profit mortgage for landowners.

Decoder

What is Sakani?

It is a program being implemented by the Saudi Arabian Ministry of Housing in partnership with the Real Estate Development Fund to allocate residential homes across the Kingdom at affordable prices, with the aim of increasing local ownership to at least 70 percent as part of the Saudi 2030 Vision goals. Hundreds of thousands of units have been allocated to citizens under the program so far.


Blessing in disguise: How pandemic was a catalyst for Saudi SMEs to change

Saudi Arabia’s consumer behavior was transformed during the lockdown as soon as malls and stores were ordered to shut their doors, creating a frenzy among consumers. (SPA)
Updated 20 September 2020

Blessing in disguise: How pandemic was a catalyst for Saudi SMEs to change

  • E-platforms played a crucial role in SMEs’ survival
  • COVID-19 transformed people’s shopping habits

JEDDAH: Saudis continue to shop online despite the government easing the COVID-19 lockdown, with the surge in e-commerce prompting small and medium-sized enterprises to adapt.

E-commerce saved global retail markets from collapse and stopped consumers from having to go out during the first wave of the outbreak. However, SMEs were the most vulnerable to the pandemic’s consequences and e-platforms played a crucial role in their survival.
Saudi Arabia’s consumer behavior was transformed during the COVID-19 lockdown as soon as stores were ordered to shut their doors, creating a frenzy among consumers although they were quick to adapt. SMEs were also forced to adapt, not only to accommodate the growing demand for online shopping but to ensure they survived with minimal losses.
Marion Janson, the chief economist at the UN’s International Trade Centre, said in June that around 20 percent of SMEs globally may not survive the pandemic.
A recent report from Visa revealed increased anxiety among merchants in Saudi Arabia, with 67 percent of small businesses noticing a decrease in average consumer spending.
Many Saudi consumers started shopping online for the first time, primarily for essentials. The Visa report showed that two-thirds of the Saudi consumers surveyed said that COVID-19 led to their first online grocery purchase, while 59 percent made their first online purchase from pharmacies.
“With the confusion at the beginning, we didn’t know what was acceptable and what wasn’t,” said Dr. Suhad Zain, a government employee in Jeddah. “Can we risk going out to shop for our daily needs or not? We needed to be sure that everyone in the house was safe, including the driver, and not expose ourselves to the invisible menace that changed our lifestyles. Most of our groceries were obtained online, from produce to water bottles to even appliances and leisure items. It had to be done, even though we needed time to accept the new change.”
Fear of the virus is expected to change the way consumers behave forever. “It became more convenient even after the lockdown was lifted,” Zain added. “After a few months we got used to it and, as a family, it became our new preferred means of purchase.”
Such conditions were a catalyst for online commerce, according to the Visa report, with 38 percent of merchants in the country reporting the introduction of online offerings as a direct result of the pandemic while more than half had an e-commerce presence before the pandemic.

Two-thirds of the Saudi consumers said COVID-19 led to their first online grocery purchase, while 59% made their first online purchase from pharmacies. (GettyImages)


The report also said there was a surge in e-commerce, a preference for trusted brands, a decline in discretionary spending, and a polarization of sustainability. Consumers have a larger basket, but reduced shopping frequency, and will shift to stores closer to home. A change can easily be detected in Saudi consumer behavior.
But the shift to online commerce, with cash transactions being replaced by digital payments, has negatively influenced cash-only retailers and presents a tough challenge to these merchants, who have to understand the shift in consumer behavior and adapt accordingly and urgently.
“Saudi business owners currently face multiple challenges that they need to deal with when they want to shift to e-commerce, some of them even lack the knowledge of how technology could benefit them and what options it could offer,” Talal Abdullah, a business development and marketing consultant, told Arab News.
“Also some will need to find a technical partner to successfully transform to e-commerce and, most importantly, they need to revisit their business model canvas to determine how they want to employ this technology for the best of their businesses.”
In order to overcome these challenges, Abdullah suggested that business owners look for the right technical partner based on their new model.
“If they fail to find a suitable technical partner, then they need to set a clear budget for the application or website they need to set up. But before reaching out to any company that offers support with these technical services, you must get in touch with real clients of these companies and inquire about their business and how they deal with them.”
He added that seeking assistance from technical consultants or owners of similar projects could cut down on time and effort. Joining business accelerators and incubators, as well as entrepreneurship and technology communities, could help with expanding knowledge and relationships and contribute overall to a smoother transition.
But these changes have their costs too, imposing new financial burdens on an already weakened business due to the pandemic and the time required to build and adapt a new business model that targets a completely different group of customers. It is a serious challenge for many small retailers.
Abu Mohammed has been in the retail business for 20 years. He used to have frequent customers who came in for a specific type of clothing with a certain price range. But, with the lockdown, he could hardly sell anything.
“I began targeting a different kind of customer in the past couple of years where I was importing new clothes and selling them through Instagram and e-commerce websites,” he told Arab News. “However I still cannot completely substitute my current store with a completely virtual one. That needs time and money to build a reputation.”
He said the lockdown had been a harsh experience for him and that he recognized the need to expedite his old plans to transform his store into an actual brand, since people were gradually moving toward online shopping from well-known brands.
“This transformation is not going to be easy at all,” he added. “It will need a good marketing plan and well-spent money not only on tools but also staff. It is a completely new experience, however. I know e-commerce is here to stay and it is our only way forward. Otherwise my work for years will gradually vanish. This crisis could be a blessing in disguise, who knows.”