JEDDAH: The Real Estate Development Fund expects three million new loan applications over the next 20 years, totaling a request for a hypothetical SR1.5 trillion — or SR1,000 million – a sum greater than the Kingdom's entire Gross Domestic Product. The projection follows the recent deletion of an eligibility clause in the fund's rules requiring loan applicants to be landowners. The three million new applicants, a source at the fund said, would be added to a long-term waiting list that is already 700,000-strong, and reflects a massive demand for housing from a population of which, he said, 60 percent “do not own their own suitable housing”. “A great many people are currently paying rent, which consumes a lot of people's income,” the source said. “The proposed solutions will take into account the overall situation in the building market, construction developers' capabilities, and house purchase financing regulations by backing the fund's revenues. The fund currently has capital of only 40 billion riyals.” Khalid Al-Ghamdi, Chairman of the Jeddah Real Estate Group, said that a high proportion of loan applicants were already property owners while another group had already been granted previous loans. Their names, he said, would be erased from the list automatically. “An alternative needs to be found to residential apartments and the government should take over construction responsibilities until suitable offers appear at affordable prices,” Al-Ghamdi said. He warned of “excesses” in the cost of most government tenders compared to the private sector, and urged the Ministry of Housing to consider the option of construction and purchase through payment in installments. “A high proportion of loan applicants will find it very difficult to obtain suitable land, and if they do find land it could consume over 50 percent of the funds from their loans,” he said. “Speculation on land is a concern in the period ahead.”
