(MENAFN - Arab News) Saudi Arabia's real estate market estimated at more than SR 1 trillion is growing at the rate of six percent annually. It contributes 9.5 percent to the nonoil GDP.
"So real estate is the Kingdom's second largest economic sector after oil," said Khaled Al-Hamoudi, president of Qassim University, while addressing a seminar in Buraidah on real estate and mortgage finance.
Economic consultant Abdullah Al-Ajaji said the construction of 500,000 housing units ordered by Custodian of the Two Holy Mosques King Abdullah at a cost of SR 250 billion would help reduce real estate prices and rents.
Falah Al-Subaie, one of the main speakers, said the new mortgage law and its executive bylaw contains regulations for real estate finance and development and allows banks to finance real estate projects.
Muhammad Al-Shayie, director of the department to monitor financing firms, said the new law was drafted after studying the main reasons for mortgage crisis in different parts of the world to avoid such problems.
Abdul Elah Al-Asheikh, CEO of Saudi Home Loans, said the Saudi real estate sector was still in the beginning stage as most Saudis depend on contractors to build their homes. "Land accounts for 60 percent of a home's cost in the Kingdom," he pointed out.
According to Al-Asheikh, unemployment among Saudis was one of the reasons that intensified the country's housing crisis.