Saudi Housing Program Contributes $31.7 Bln to the GDP

Saudi Minister of Housing Majid Al-Hogail addresses the conference. (Asharq Al-Awsat)
Saudi Minister of Housing Majid Al-Hogail addresses the conference. (Asharq Al-Awsat)
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Saudi Housing Program Contributes $31.7 Bln to the GDP

Saudi Minister of Housing Majid Al-Hogail addresses the conference. (Asharq Al-Awsat)
Saudi Minister of Housing Majid Al-Hogail addresses the conference. (Asharq Al-Awsat)

Saudi Minister of Housing Majid Al-Hogail stressed the importance of the housing sector to Saudi Arabia’s gross domestic product.

 

The Saudi housing program contributed $31.7 billion to the GDP, he said, while real estate financing exceeded $194 million in the first quarter of 2023.

 

Al-Hogail’s remarks came during his participation in the fourth edition of the Saudi Housing Finance Conference, which is hosted by Euromoney Conferences in Riyadh.

 

Held in partnership with and co-hosted by the Housing Program, Real Estate Development Fund (REDF), General Authority for Real Estate (REGA) and Saudi Real Estate Refinance Company (SRC), the theme of this year’s conference is “Meeting the challenges of scale”.

 

The minister stated that the sector contributed to providing 227,000 job opportunities in the first quarter of 2023, noting that the ministry relied in its projects on modern environmentally friendly technology, social coexistence, humanization, and designs that suit the Kingdom’s environment.

 

Al-Hogail added: “The housing market continues to play a defining role in the Kingdom’s growth and development. That we have made such significant strides as a nation over the last few years owes a great deal to the contributions of our housing sector to the national economy.”

 

Meanwhile, statistics at the conference showed that the total subsidized real estate financing contracts during the past 6 years exceeded 724,000, with a total value of 429 billion riyals ($114.4 billion).

 

Mansour bin Madi, CEO of the Real Estate Development Fund, said: “The pioneering role of the real estate fund contributed to creating a real estate financing market that enhanced the opportunities... and enabled partners and financing agencies to devise programs that support the goals of the fund.”

 

More than 500 participants discussed during the conference the latest developments in the Kingdom’s transition to an effective and innovative housing market.

 

Talks also centered on lessons learnt from international markets, the importance of financial and capital markets, the new regulatory landscape, mega projects, liquidity, higher interest rates and educating the investor base.

 



Saudi Real Estate Activities Record Deals Worth $170Bn Since Beginning of 2024

The Al-Qasr project, one of the projects of Dar Al Arkan Real Estate Development Company in Riyadh (Reuters)
The Al-Qasr project, one of the projects of Dar Al Arkan Real Estate Development Company in Riyadh (Reuters)
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Saudi Real Estate Activities Record Deals Worth $170Bn Since Beginning of 2024

The Al-Qasr project, one of the projects of Dar Al Arkan Real Estate Development Company in Riyadh (Reuters)
The Al-Qasr project, one of the projects of Dar Al Arkan Real Estate Development Company in Riyadh (Reuters)

Real estate activities in Saudi Arabia continued to grow since the beginning of 2024, recording more than 280,000 transactions worth more than $170 billion (SAR 636 billion), and extending over a total area of more than two billion square meters.

The sector’s contribution to the Saudi GDP reached 5.9 percent in the fourth quarter of 2023.

During the last week ending June 22, the real estate stock exchange witnessed 518 deals, with a transaction value exceeding SAR 331.7 million, and a trading area of about 900,000 square meters. The highest recorded price per square meter reached about SAR 15,000, while the average price was SAR 371 riyals.

Al-Wisam area in Jeddah topped the list of the most traded neighborhoods in Saudi Arabia on the real estate stock exchange during a week, with a value of transactions exceeding SAR 89.3 million, followed by the Arid district in Riyadh, with a value reached SAR 6.35 million.

The list included Al-Rimal neighborhood in Riyadh, with a value of SAR 5.59 million, followed by Jawharat Al-Arous in Jeddah, with a value of SAR 3.98 million, and the northwestern Al-Bukayriyah district, with transactions reaching SAR 700,000.

In remarks to Asharq Al-Awsat, real estate expert Eng. Ahmed Al-Faqih said the sector is seen as the safest option in light of the changes and fluctuations of the stock and gold markets and their impact on rising interest rates.

He added that the real estate market has shown stable and steady growth in all its sectors, thanks to the investors’ confidence in the government’s policies and the injection of large capital by launching huge real estate projects such as Qiddiya, NEOM, the Red Sea, and others.

In addition, the market has witnessed in recent years a package of legislation and regulations that have increased confidence and further attracted capital and real estate investments, he underlined.

He added that since the third quarter of 2023, the Saudi market has seen a remarkable increase in the number and value of real estate deals compared to the previous quarter, which indicates a change in the general mood of investors and their shift from a state of anticipation to seizing real estate opportunities.

Another real estate expert, Saqr Al-Zahrani, told Asharq Al-Awsat that the performance of the Saudi market reflected the remarkable growth and sustainability of demand for real estate, adding that the numbers and sizes of transactions registered through the real estate stock exchange highlighted the confidence of investors, thanks to government efforts and the economic reforms implemented within Vision 2030.

Al-Zahrani stressed that the real estate sector represents one of the basic pillars of the Saudi economy and contributes significantly to supporting the gross domestic product through huge investments and large development projects.

He also noted that government initiatives to regulate and promote investments in the real estate sector have revitalized the economy and created broad job opportunities for citizens and a variety of new skills in the real estate sector, thus reducing unemployment rates and achieving sustainable development.

He identified several reasons that supported the continued growth and sustainability of the Saudi real estate sector, including economic reforms and policies for investment, in addition to the government’s efforts to improve the business environment by facilitating procedures.

Al-Zahrani pointed to the mega projects taking place in the Kingdom and their role in attracting investments, as well as the increasing demand for housing and associated services as a result of urbanization.

In addition, political and economic stability played a vital role in enhancing investor confidence and encouraging long-term investment in real estate, he stated.