JEDDAH — The housing problem is a national issue of the highest order. The issue requires solidarity among all those concerned to provide serious and radical solutions to the numerous social, security and economic issues on one hand and to ensure the stability of the country on the other. Land developers are unanimous that a real partnership among all those concerned will resolve the housing problem. They asked the public sector to make the effort to promote its partnership with the private sector and help reduce the high prices of land and enable citizens to own their private houses. They noted that the steps being taken towards this end are in the right direction and will achieve many objectives. The developers are certain that the Ministry of Housing needs a system that will organize its relationship with the private sector in a manner that will best serve justice and transparency. They hoped that most of the housing units would be implemented by the private sector in the future as soon as a regular framework for this move has been established by the ministry. The developers noted that the mechanism for distributing the housing units has not yet been completed but said there were proposals concerning the mechanism such as counting the family members and knowing the exact number of people with special needs. Developing the housing sector The government is making strenuous efforts to develop the housing sector through the launch of its future development plans. This is in addition to the royal decrees that have enriched the market and created immense activities. The government has a clear-cut strategy aimed at building suitable housing units to all citizens. This strategy has helped the Real Estate Development Fund (REDF) to launch various programs that will serve the citizens through new modalities that will narrow the gap between the value of the house and the ability of the citizen to buy. Participation of the private sector The private sector must participate in the execution of government decisions. The partnership between the public and private sectors is the fundamental base for the implementation of development projects under plans that will provide studied solutions. These plans should include residential areas, public parks, mosques, and centers for educational, health and entertainment services. The public and private sector should join hands to develop the real estate sector in the Kingdom. The public sector should formulate the rules and regulations that will enable it control the market. It should also construct housing units in large numbers to reduce the high prices and enable citizens to buy. Partnership between the two sectors A number of real estate investors are of the opinion that the partnership between the public and private sectors will turn the housing crisis into a feasible investment that will serve all parties, including the final consumer, through reduced prices and high quality. They said this partnership entails cooperation with various government departments including the Ministry of Housing. They also said this partnership should result in offering new planning parameters to check the population mix, the targeted categories, the intake capacities of the towns and cities and distributing the population among various areas so that the Kingdom will not enter into what they call a “real estate bubble”. The investors appreciated the current activities in the housing sector and said this matter requires the provision of immense real estate products. They said the order of Custodian of the Two Holy Mosques King Abdullah to establish a housing ministry illustrates his keenness to find a final solution to the housing problem. The King has ordered the construction of 500,000 housing units covering all the regions, raising the ceiling of real estate loans to SR500,000 and injecting SR40 billion into REDF. Government housing contracts The investors are unanimous that the solution to the housing problem lies in the real partnership between the public sector, represented by the Housing Ministry, and the private sector, represented by the real estate developers. They said there were no serious moves during the past four decades by REDF to resolve the housing problem. The investors, however, said the fund has started to offer new programs and services to the citizens including the Damen (guarantor) program and others. They said these programs would narrow the gap between the real value of the housing unit and the ability of the citizen to buy. They expected the fund to sign partnership agreements with a number of commercial banks, financing institutions and investment companies in the very near future for the execution of its Damen program. The investors said the signing of eight contracts worth SR4 billion by the minister of housing to develop land plots covering a total area of 26 million square meters in various cities to accommodate about 250,000 citizens would bring down real estate prices, making them affordable to citizens. Makkah Project The Makkah Project recently launched by the province's Emir Prince Khaled Al-Faisal was a good example of the partnership between the public and private sectors to reduce real estate prices and increase construction quality. The housing projects provide the most conducive environment for this partnership. There are many international experiences where the governments drafted laws to organize the partnership between the two sectors. The partnership between the two sectors in the Kingdom still needs more attention and coordination to realize the interests of each sector. This partnership can only be achieved through hard work that will take the future challenges into account. There are opportunities for this partnership that should be exploited before it is too late. The two sectors should realize that the government has enough financial resources and enough land. Population growth The growth of the Kingdom's population over the past 40 years is best represented by Jeddah. The city has expanded, especially to the north. The increase in the number of the city's residents has likewise increased the demand for accommodation and made the city the focus of real estate developers and investors. This growth has coincided with the increase of the loans to be provided by the REDF. The fund's capital has been increased and more liquidity injected in it to provide more loans to the citizens. The youth and newly married citizens represented the bulk of the loan seekers. There is also a general awareness among investors and real estate developers about the feasibility of investing in untapped areas. Search for accommodation The real estate investors said the search for houses in north Jeddah is not new and actually started more than two years ago with the rapid increase in tourist resorts, public parks, restaurants and entertainment spots. North Jeddah, especially the Dhahban area best known as the “new Jeddah”, has become the favored spot for government departments, private sector companies, citizens and investors.
