Over 3.5 million citizens have applied for loans from the Real Estate Development Fund (REDF) following the removal of the stipulation that applicants should own a plot of land to qualify for a loan. The question is: Will REDF loans help reduce real estate prices so that a citizen can own his own house? If the average price of a plot of land is SR1,500 per square meter and the area of the plot of land is not less than 500 square meters, will SR500,000, the maximum loan amount, be enough to cover the costs of building a house? Will the increase in the number of loan applications contribute to raising real estate prices, especially plots of land? Abdullah Al-Ahmari, a real estate appraiser, said that “The REDF can help reduce real estate market prices and solve the housing problem if and when it plays a similar role to that of the Ministry of Housing in terms of financing the Ministry-run projects. Or if the REDF takes on the responsibility of building houses, especially in light of the considerable support from the government.” Since the Ministry of Housing still has a lot of time before it begins implementing its residential projects, the REDF can take on the responsibility of implementing projects involving residential towers and complexes which have proved to be successful in the Kingdom and other countries, Al-Ahmari added. “I believe that exempting new applicants from the land ownership condition will greatly contribute to reducing prices on the outskirts of cities. Moreover, establishing the Ministry of Housing and the construction of 500,000 residential units in the next few years will go a long way to solving the housing problem. Those who say otherwise are real estate businessmen who want to monopolize the real estate market and do not care about limited-income citizens. How do you explain the announcement by the Land Encroachment Committee that 280 million square meters of plots of land in Jeddah have been encroached upon? You can build large residential projects on this area which has been monopolized by real estate businessmen and solve the problem of housing for thousands of Jeddah's limited-income residents, let alone the residents of other cities.” Khalid Al-Ghamdi, the Head of the Real Estate Association, said that “the real estate market won't be affected by REDF loans because the offers available on the market can meet the demands of citizens to own houses. The loan amount can buy an apartment and will help the citizen buy a villa for SR700,000.” Essam Khalifa, a member of the Saudi Economics Society, said that “The Royal Order to establish the Ministry of Housing, the SR40 billion support for REDF, the increase of the loan amount to SR500,000, the cancellation of the condition which requires applicants to own a plot of land before applying for a loan, the SR250 billion support for the General Housing Commission to establish 500,000 residential units, all this will contribute greatly to solving the housing problem.” __
