Saudi Arabia is set to enact a new mortgage law within the next few months which has the potential to increase housing demand by as much as 50 percent. The upcoming set of legislation will especially boost the under-served low- and middle-income markets by clearly outlining mortgage policies and introducing more mortgage options as well as allowing banks to further diversify their portfolios by engaging in property investments. “Unlike other Gulf states, Saudi Arabia's real estate sector is not undergoing market correction as its housing demand remains very high. Jeddah alone has already rolled out a strategic plan to build almost a million units by 2030 to cope with rural migration and an expanding expatriate population. There is still so much room for growth and the new mortgage law will add much-needed order as the low- and middle-income sectors begin to gain more buying confidence,” said Deep Marwaha, event director of Cityscape Saudi Arabia. Under the Patronage of Prince Misha'al Bin Majed Bin Abdul Aziz, Governor of Jeddah, Cityscape Jeddah 2010 is endorsed by the Ministry of Commerce and Industry and supported by the Jeddah Chamber of Commerce and Industry. Cityscape Jeddah is the Kingdom's premier real estate investment & development event taking place on June 7-9 at the Jeddah Center for Forums and Events. It will introduce regional and international developers and investors to existing and potential property developments within the Saudi real estate sector. A focal point of the event is the 2nd annual Saudi Arabia Real Estate Investment and Development Conference, which will be held under the theme “Transparency, Investment Models and Future Partnerships.” “Initiatives such as the mortgage law are crucial for potential homeowners to make better choices and for industry players to properly plan for growth in this thriving market. Moreover, it is essential that a solid regulatory framework be put in place so that industry movements align well with the government's broader development agenda,” said a speaker at the conference. Mortgage lending currently accounts for only 2 percent of the Kingdom's GDP, and yet only 35 percent of Saudi nationals own their homes. The new law, which many analysts believe will trigger the country's second housing boom, complements real estate's emergence as one of Saudi Arabia's strongest and most reliable revenue generators. Around 47 percent of local businessmen agree that property is currently the most lucrative market in the country. “The Kingdom needs to enhance the way it finances housing purchases and how it uses financial instruments for such transactions if it wants to sustain its leadership in the regional property business. The mortgage law is an important step in broadening opportunities for buyers, investors and developers and establishing the country as a top real estate hub,” said Ayedh Al-Qahtani, chairman, Sumou Real Estate. A lineup of conference speakers include, among others, Fahad Bin Saleh Al Sultan, secretary general of the Council of Saudi Chambers; Dr. Abdulgader Amir, former vice mayor of Jeddah and vice president of Jeddah Development and Urban Regeneration Company; Ayedh Al-Qahtani, chairman of Sumou Real Estate; Ahmed Al-Khateeb, managing director and CEO of Jadwa Investment; Humphrey Percy, chief executive officer and executive director, Bank of London and The Middle East; Diab Chidiac, director of Real Estate, Shuaa Capital. Meanwhile, around 1.5 million homes are expected to be constructed in the Kingdom of Saudi Arabia through 2015 to accommodate a rapidly rising population that is set to exceed 26 million within the next three years. Long-term residential housing demand will remain strong, as almost 40 per cent of the Saudi population is under the age of 14 and personal disposable income is projected to grow at a compound annual growth rate of 6.5 percent to reach around SR659 billion by 2013. The Kingdom's property markets have remained highly stable during the global crisis, in contrast to those of other Arab states. As the Middle Easts largest economy, the Kingdom offers numerous business and investment opportunities for real estate developers and investors as well as a sound financing infrastructure. The Riyadh Exhibition for Real Estate and Architecture Development (Restatex) 2010 slated on May 9- 12 at the Riyadh International Exhibition Center will showcase key residential projects within the thriving Saudi property market. Injaz Development Company, a leading real estate development, investment, marketing, and services firm, will display its comprehensive property portfolio and discuss expansion plans during the event. Around 250,000 homes need to be built each year within the next five years to keep pace with demand, so residential property will continue to be a key segment for local industry. During the past four years Injaz has been building up its capabilities in various real estate functions. Restatex will be a perfect venue for us to highlight our contributions to Saudi Arabia property business and form new national and regional partnerships, said Omar Al Kadi, president and managing director, Injaz Development Company. Injaz was established in 2006 to develop total solutions for the local and regional property sectors. The company's services include identification and acquisition of potential real estate investments, internal and third-party project development, property marketing, and sales support such as financing through local banks.
