The gap between housing demand and supply in Saudi Arabia is narrowing as banks start to lend and government support boosts sector development, the director of Jones Lang LaSalle in Saudi Arabia said Tuesday. John Harris told the Reuters Middle East Investment Summit that “now the banks are lending again and people have more confidence so I think we are seeing people introducing and starting to construct new projects that were on hold for the past two or three years.” “I can't quantify how far we closed the gap but if we had a shortfall by half, maybe it is only a quarter now; the gap is closing,” he said. Saudi Arabia has a fast growing population of 27 million people, most of whom are under the age of 30. Real estate service company Jones Lang LaSalle estimates annual demand for housing to be between 150,000 and 200,000 units per year. The gap in housing, Harris said, is mainly due to a shortage of supply for lower- and mid-income families. “Until recently most big developments in Saudi Arabia were targeting the top 10 percent of households. What has changed now is the government's ministry of housing has been created ... creating housing for lower income families,” he said. “Now they actually have substantial companies with big shareholders building 1,000-2,000 units at a time so we are seeing more supply there,” Harris said.
