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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)
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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.

 

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Saudi Transport, Logistics Sector Set for 10% Growth in Q2

An investor monitors a trading screen at the Saudi financial market in Riyadh. (AFP)
An investor monitors a trading screen at the Saudi financial market in Riyadh. (AFP)
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Saudi Transport, Logistics Sector Set for 10% Growth in Q2

An investor monitors a trading screen at the Saudi financial market in Riyadh. (AFP)
An investor monitors a trading screen at the Saudi financial market in Riyadh. (AFP)

As Saudi companies start reporting their Q2 financial results, experts are optimistic about the transport and logistics sector. They expect a 10% annual growth, with total net profits reaching around SAR 900 million ($240 million), driven by tourism and an economic corridor project.

In Q1, the seven listed transport and logistics companies in Saudi Arabia showed positive results, with combined profits increasing by 5.8% to SAR 818.7 million ($218 million) compared to the previous year.

Four companies reported profit growth, while three saw declines, including two with losses, according to Arbah Capital.

Al Rajhi Capital projects significant gains for Q2 compared to last year: Lumi Rental’s profits are expected to rise by 31% to SAR 65 million, SAL’s by 76% to SAR 192 million, and Theeb’s by 23% to SAR 37 million.

On the other hand, Aljazira Capital predicts a 13% decrease in Lumi Rental’s net profit to SAR 43 million, despite a 44% rise in revenue. This is due to higher operational costs post-IPO.

SAL’s annual profit is expected to grow by 76% to SAR 191.6 million, driven by a 29% increase in revenue and higher profit margins.

Aljazira Capital also expects a 2.8% drop in the sector’s net profit from Q1 due to lower profits for SAL and Seera, caused by reduced revenue and profit margins.

Mohammad Al Farraj, Head of Asset Management at Arbah Capital, told Asharq Al-Awsat that the sector’s continued profit growth is supported by seasonal factors like summer travel and higher demand for transport services.

He predicts Q2 profits will reach around SAR 900 million ($240 million), up 10% from Q1.

Al Farraj highlighted that the India-Middle East-Europe Economic Corridor (IMEC), linking India with the GCC and Europe, is expected to boost sector growth by improving trade and transport connections.

However, he warned that companies may still face challenges, including rising costs and workforce shortages.