Saudi Arabia's housing minister said urban land left undeveloped could be confiscated to build much-needed homes, local media reported on Saturday.

The world's top oil exporter and biggest Arab economy is pushing to reform its housing and labour sectors to make it easier for citizens to get places to live and jobs at private companies.

A shortage of land in big cities has frustrated efforts to build half a million homes - a project ordered by King Abdullah in 2011 which analysts say was one of several steps taken to avert 'Arab Spring'-style unrest.

Wealthy Saudis have bought residential land plots around the country as long-term investments, pushing up prices and making them too costly for developers of lower-income housing. Under a previous system, other plots were awarded as land grants to citizens who could not afford to develop them.

A royal decree earlier this month ordered ministries to give up land for development to the Housing Ministry.

"The expropriation of properties for the public interest is done around the world. We might do it in a limited way," said Housing Minister Shuwaish al-Duwaihi in comments in a television interview reported by the Arab News newspaper.

Unused military land will also be used for future housing, he added. "We are coordinating with military sectors to take their lands which they don't need," he said.-Reuters