Saudi Arabia is facing a huge housing shortage amid a surge in demand and needs SR500 billion ($133 billion) in financing to construct 1.25 million houses by 2014, said an expert.

The total real estate financing is set to reach SR60 billion by 2013, as a result of growth in total real estate lending by SR17 billion in the second quarter of this year alone, revealed Hasan Al-Yamani, the director at Abdul Latif Jameel Real Estate Installments citing real estate data.

Al-Yamani was speaking ahead of the Riyadh Urban Development and Real Estate Investment Event 2012 in the Saudi capital.

Currently in its third year, Riyadh Urban Development and Real Estate Investment Event – Cityscape Riyadh is anticipated to be the most spectacular event yet, hosting exciting new features and business- focused opportunities in 2012, while once again serving the Saudi community as the premier platform to meet, network and discuss development opportunities in Riyadh, the Kingdom and beyond.

"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 per cent of Saudi citizens to become first-time homeowners," Al-Yamani noted.

He pointed out 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," said the company chief.
 
"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," he added.

In response to the housing crisis, the Saudi government, he said, had taken a resolute approach in investing in the housing sector through the implementation of the newly established Ministry of Housing and the allocation of SR250 million to build an initial 500,000 new housing units.

“Stemming from the urgent need of assuming an active role in solving housing issues in the Kingdom, we truly appreciate the government’s participation in finding solutions and are grateful of its support of key events such as Cityscape Riyadh,” said Martin Cooper, the director and general manager DTZ Saudi.

According to him, the event is anticipated to provide an excellent platform to discuss the opportunities and challenges facing Saudi Arabia’s real estate market.

“For example, The government has taken significant measures to address the gap in residential market, through the planned provision of 500,000 new homes, the endorsement of the Saudi mortgage law earlier this year and the allocation of over 250 million sq m land for housing development, issues that will be of particular interest to key stakeholders in the Kingdom’s real estate sector and provide an opportunity to discuss these and other initiatives and how the private sector can help to deliver them,” said Cooper.

Hussain Al-Harthy, the managing director of National Exhibitions Company said, “This year’s Cityscape Riyadh is of exceptional interest to all investors, real estate professionals and anyone interested in getting a first-hand look into the rules and regulations concerning market opportunities, borrowers and lenders rights, clarification of the foreclosure process, as well as implications and effects of the newly-approved Saudi mortgage law on the Kingdom’s real estate market.”

This year’s event, will be a unique mix of specialized activities including an exhibition, a three-day real estate summit, investor round tables, post-conference workshops and a prestigious annual awards ceremony designed to reward industry professionals and companies that have shown outstanding real estate development and architecture for both build and future projects in the Kingdom, the Cityscape Awards for Real Estate, he added.-TradeArabia News Service