(MENAFN - Arab News) Lack of supply of affordable homes is a concern in the Middle East as a whole and no more so than Saudi Arabia. According to various studies and analysis, the discrepancy between supply and demand of housing units in Saudi Arabia is significant. Such huge demand for new residential properties in Saudi Arabia has led to the establishment of the Ministry of Housing in 2011.
CityscapeConnect Business Breakfasts is a platform that provides real estate investors and developers with an opportunity to network while gaining valuable market insight from a panel of real estate experts. Notable speakers at the CityscapeConnect Business Breakfasts in Alkhobar and Jeddah will address the Kingdom's affordable housing debate and tackle the home buyers' expectation on affordable housing among other discussions. They are taking place at the Mvenpick Hotel in Alkhobar on Sunday and the Jeddah Hilton on Monday.
Commenting on the market's lack of sufficient affordable housing, Abdulaziz Al-Shaibani CEO of Al-Oula, said: "The government's strategy is dependent on private developers' willingness and capability to provide affordable housing. On the other hand, significant challenges still remain in the local markets, to make affordable housing feasible due to the huge demand gap that is outstripping supply, in addition to legislative obstacles. However, given the fundamental demand driver, there should be significant opportunities for investors and developers to achieve sizable returns. As for the real estate market in general, strong population growth continued economic development and diversification are set to ensure robust demand for all types of real estate over the coming decade."
Commenting on the housing needs of the Eastern Province, Jenan's MD & CEO Bassam Boodai, said: "It is expected that the Eastern Province will require around 150,000 housing units by 2014, which is the highest demand in the Kingdom." Looking at the overall picture he went on to say: "According to the Central Department of Statistics and Information, Saudi Arabia's population is growing at a rate of 3.2 percent and with about 60 percent of Saudi population under the age of 30 the private and public sector needs to take serious action to cater for the ever increasing demand. The government has already taken decisive action to tackle the problem by injecting SR 250 billion into affordable housing and now it's up to the private sector to accommodate the demand. A collaboration between the private sector and the government will be the most effective approach to meet the increasing demand in a record time."
Saudi Arabia has traditionally been a country where home construction or purchase was self-financed, with family and personal savings being the major driver of property financing. This is starting to change as progress is being made in mortgage financing and new regulations for off-plan financing. Bank financing is still relatively limited and out of reach for a significant proportion of the population. Real estate and construction loans accounted for 7.1 percent of total bank credit in 2010 while home loans were only 2.8 percent of total bank credits. This is very low in comparison to other GCC countries.
"The Kingdom's real estate sector is now maturing as it begins to fulfill the high expectations of investors. The CityscapeConnect Business Breakfasts serve as a prelude to the annual Cityscape Jeddah event in June 2012 with its unique portfolio of exhibition and summits which is in line with the government's vision for growth in the real estate industry," said Deep Marwaha, group director of Cityscape. "In addition to affordability in the residential market, the Business Breakfasts will cover the need for innovative financing models to secure the funds for project development in the current climate, profitability structures for public-private partnership models, and the cost of land for developing affordable housing projects in attractive locations."
Key panelists at the Alkhobar Business Breakfast are Boodai; Khalid M. Telmesani, MD & CEO of Sumou Real Estate; and Al-Shaibani, while the Jeddah event includes experts such as Gagan Suri, VP, head of real estate, asset management at NCB Capital: Martin Cooper, director & head of advisory - Middle East at DTZ; and Zuhair Hamzah, executive manager of Tamlik Company among many others.