Impressive construction projects are underway in Saudi Arabia that will greatly change the country in the coming years. Three outstanding examples are “The Line,” a 170-kilometer-long mirrored desert city, the “Mukaab,” a gigantic indoor super city, and the “Maraya,” the world’s largest mirrored concert hall. These projects are part of a comprehensive development drive aimed at boosting technology, sustainability and innovation. But what about the housing market in Saudi Arabia? A look at current initiatives and successes in this area provides insight. Prestige buildings and the real housing market – development up to 2030.
3 examples I have brought with me. “The Line“, a 170 kilometer long, 500 meter high, mirrored line will soon cross the Saudi Arabian desert. In Riyadh, the “Mukaab” is being built. Simply put, the most expensive surprise egg in the world! Costing 800 billion, the construction will provide space for 20 Empire State Buildings. A 400 meter high, wide and long indoor super city in the center of Riyadh. Example 3 is the “Maraya”, the largest mirrored concert hall in the world.
The Line: 170 kilometers long – The desert city
A 170-kilometer-long, 500-meter-high mirrored line will soon cross the Saudi Arabian Desert. People will live and work in it. Another superlative project, following the recent inauguration of the mirrored concert hall. The Line will be the name of the city, with over 9 million inhabitants. Under the title “What if we could start again” only the ideas are presented. The Saudi Arabian government has unveiled the first images of the 500-meter-tall rectilinear city called The Line, which will be built as part of Neom, near the Red Sea.
The Line will be a car-free and equally carbon-free (CO²) city the size of the country of Belgium.
“The Mukaab” has just been presented by the Crown Prince of Saudi Arabia. What is planned? An impossibly large, 400-meter high, wide and long indoor super city, right in the center of Riyadh. With space for a full 20 Empire State Buildings, the project is to be financed by the PIF and become a new global symbol for technology, sustainability, mobility and Saudi innovation.
“The Mukaab” is at the center of the broader New Murabba development project launched by Crown Prince Mohammad bin Salman bin Abdulaziz, the prime minister and chairman of the New Murabba Development Company (NMDC). The Riyadh Giga project is scheduled to open in 2030.
I must show you the Maraya Concert Hall in Saudi Arabia! A real architectural highlight and certainly a hotspot of this world in the future. Al-Ula is a unique region in Saudi Arabia that was hidden from tourists until September 2019. Now the whole world has the opportunity to discover ancient places that are more than 6,000 years old.
House market Saudi Arabia: Development until 2030 (PwC)
Away from the prestige projects, how is the country developing? This report from PwC provides an insight.
Own surplus ratio to increase by +8% to 70%.
In 2020, an ownership rate of 62% was achieved, and the goal is to reach an ownership rate of 70% by 2030. The real estate sector already contributes about 7% to Saudi GDP and creates many jobs. In 2021, 40,000 job opportunities were created in the real estate sector alone.
To address housing challenges, Saudi Arabia has undertaken a number of initiatives since 2017. The Ministry of Municipal and Rural Affairs and Housing (MoMRA) has launched the Housing Program, which aims to improve Saudi families’ access to affordable, quality, safe, and well-located housing for first-time buyers.
Funding initiative: What is planned?
The initiative also aims to increase private sector involvement and improve financing options for Saudi families. Various measures have been taken to this end, including injecting liquidity into the market, tax reform, reducing capital requirements, developing new mortgage products and strengthening the rental market.
The Saudi Real Estate Refinance Company (SRC) was established in 2017 to inject liquidity into the real estate market and improve homebuyers’ access to sustainable financing solutions. By the end of 2020, SRC’s loan portfolio reached SAR 6.5 billion, and the goal is to have refinanced 20% of the total residential mortgage loan market in Saudi Arabia by 2025.
Sakani program has assisted 210,000 Saudi families (2021).
The successes of the housing program are already clearly visible. The supply of housing in Saudi Arabia has improved significantly, and many Saudi families have realized their dream of home ownership. In 2020, the homeownership rate in Saudi Arabia reached 62% and will reach the target of 70% by 2030. The Sakani program has assisted more than 210,000 Saudi families in 2021 alone, and a total of 1.2 million families have already benefited from the program. The mortgage market in Saudi Arabia has also grown significantly, with 295,590 contracts in 2020 worth a total of SAR 140.7 billion for Saudi families.
1.2 million new homes needed
For the future, the focus of the housing program is on the most disadvantaged population groups and increased private sector participation. Around 1.2 million new homes will be needed in the coming years to reach a housing stock of 4.96 million homes by 2030.
The transformation of the housing market in Saudi Arabia is a success story and will have far-reaching implications for the Kingdom. The government has taken robust measures to address the challenges of the housing market and make the dream of home ownership possible for new generations of Saudis.
Saudi Arabia is not only investing in spectacular construction projects such as “The Line”, the “Mukaab” and the “Maraya”, but has also launched a major initiative to promote the housing market. Measures such as the Sakani program and the establishment of the Saudi Real Estate Refinance Company have increased the ownership rate and improved access to affordable housing. The housing market has already developed significantly, and the government has ambitious plans to further meet housing needs. The transformation of the housing market is a success story for Saudi Arabia and will have a far-reaching impact on the country by realizing the dream of home ownership for many Saudi families.
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