(MENAFN - Arab News) Saudi Arabia is facing a huge housing shortage as demand continues to outstrip supply requiring SR 500 billion in financing to construct 1.25 million houses by 2014.
Total real estate financing is also forecast to reach SR 60 billion by 2013, as a result of growth in total real estate lending by SR 17 billion in the second quarter of this year alone, leading experts to comment that the implementation of the Kingdom's newly approved mortgage law may be a prime solution to the housing crisis.
"With the landmark approval of the Saudi mortgage law in July, the Kingdom's population quadrupling over the last four decades, requiring 4.6 million houses by 2020, I expect that the mortgage law will have a moderating effect on the Saudi real estate market over the short-to-medium-term, allowing up to 80 percent of Saudi citizens to become first-time homeowners," said Hasan Al-Yamani, director at Abdul Latif Jameel (ALJ) Real Estate Installments at the Riyadh Urban Development and Real Estate Investment Event 2012.
He further stated that due to the rapid increase of real estate prices in recent years, particularly within the major cities, both Saudis and non-Saudi residents are in urgent need of financing in order to own property. This is why Abdul Latif Jameel Company has introduced real estate financing for both Saudis and residents in order for them to be able to own their desired homes through a trustworthy and Shariah-compliant company, while offering peace of mind to its customers.
Customers can now enter into a lease agreement with ALJ Real Estate Installment Co. with the promise of ownership at the end of the agreed term, which can be up to 15 years.
In response to the housing crisis, the Saudi government has taken a resolute approach in investing in the housing sector through the implementation of the newly established Ministry of Housing and the allocation of SR 250 million ( 67 billion) to build an initial 500,000 new housing units.