Saudi construction work valued at more than $400 billion is due to be completed in the next decade. Increasingly, some of the largest investments are likely to lie in real estate development as well as industry and infrastructure.
A proposed new mortgage law is expected to provide further stimulus to the expanding housing market later this year. As a result, some believe that the Saudi demand for homes could be shaping up to unleash the biggest building boom yet seen in Arabia.
In the early 1980s almost all housing and real estate development was government sponsored. The situation is changing fast with the private sector leading and more than 50 companies alone licensed to sell and develop real estate in the Kingdom last year.
While existing cities and communities are already seeing major developments there is also an intense focus on the $150 billion worth of government sponsored investment that has been committed to new cities due to be built around a core of economic projects.
All of the economic cities will feature major residential and commercial real estate developments. Around 1.5 million people are expected to move to the new cities in the medium term and three times as many by 2020.
The region's big names are seizing the opportunity. Prince Alwaleed bin Talal al-Saud's Kingdom Holding Company, following on from its towering Al-Faisaliah development, is planning multi billion dollar real estate investments in both Riyadh as well as Jeddah.
The government's go ahead for construction of high-rise buildings in Jeddah is being seized upon by companies keen to develop sites overlooking the Red Sea.
Dubai's Emaar Properties, apart from its involvement in joint ventures to build the Kingdom's giant King Abdullah Economic City at Rabigh, is among a growing number of regional developers committed to residential developments in Saudi Arabia.
These include the Al-Khobar Lakes and Jeddah Gate projects. The latter involves a $700 million investment to build 5,000 homes on the 5 million square foot old Jeddah airport site.
Dubai's Damac properties has also decided to enter Saudi Arabia's fast expanding property sector with plans for a 40 storey tower block development on Jeddah's corniche. The intention is to establish a strong local presence in a number of Saudi cities Chief Executive Peter Riddoch says.
Major development of hotels and residential accommodation as well as new infrastructure development is also stimulating real estate markets in the pilgrimage cities of Mecca and Medina.
* Picture: The King Abdullah Economic City is just one of many real estate projects underway in Saudi Arabia
Reference: http://www.ameinfo.com/122936.html
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