For more than 25 years, the housing sector in Saudi Arabia has faced challenges such as inadequacy and enormous gaps between supply and demand.
That has begun to change following recent developments, including the introduction of a new scheme as part of the Kingdom’s Vision 2030 reform plan.
The new housing program offers solutions to enable Saudis to own or beneﬁt from new housing. The program also aims to improve the living conditions for current and future generations, increase the supply of affordable housing units in record time, and enhance access to subsidized and appropriate funding.
A recent report published by the Ministry of Housing showed significant improvement in the housing sector in the Kingdom, reflected in a huge increase in the number of homeowners. The active partnership and successful collaborations between the ministry and financing companies including Saudi banks and real estate developers, have resulted in seismic shifts, as the number of owned and occupied houses by Saudi households increased by 8.84 percent to 2.285 million homes in 2019 compared to 2.1 million homes in 2017.
These results also reflected positively on the Kingdom’s economy, as the housing sector grew by 0.04 percent of gross domestic product (GDP) in the third quarter of 2019, and 5.99 percent of non-oil GDP compared to the same quarter in 2018.
Finally, housing financing provided by Saudi banks and finance companies amounted to $21 billion in 2019, a growth rate of about 168 percent over 2018, and the number of loans offered by the same entities reached 179,217 in 2019 compared to 50,496 loans in 2018 — a growth rate of 255 percent.
Such impressive results will help in the Kingdom’s goal to raise household ownership in the country to 70 percent of the population by 2030.
• Talat Zaki Hafiz is an economist and financial analyst.