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Key takeaways from Saudi Housing Finance Conference

Currie & Brown have been providing expert advice to the KSA real estate sector for over six years, supporting the region in its housing development programmes. James Irvine, senior director and KSA country manager recently took part in a panel discussion at the Saudi Housing Finance Conference in Riyadh.

James IrvineThe discussion focused on ‘The Saudi housing market – the next phase (2024-2030)’ and included comments from leading CEO’s from the National Housing Company, General Authority for Real Estate, Housing Program and the Real Estate Development Fund.

James has outlined the key successes for the market to date and what we can expect to see over the next few years as the KSA residential property market continues to rapidly evolve.

 

Key successes

  • The implementation of 2030 Vision and ongoing execution of the Housing Program
  • The housing sector now equates to circa 8% of GDP. With a target to increase to 10% by 2030.
  • 40,000 jobs have been generated in the real estate sector alone with a significant increase projected over the next five years projected.
  • The current home ownership rate is circa 62%.
  • The Saudi Real Estate Refinancing Company has been set up via PIF to inject liquidity into the market, its loan portfolio has now reached SAR 6.5Bn.
  • Introduction of taxation reform – a waiver of 15% VAT on real estate in 2020 has now been replaced by a real estate disposal tax of 5% with exemptions for first time buyers.
  • Reduced deposits when purchasing a property – shrinking to 5% from 30%
  • Developing new mortgage products has resulted in the doubling of mortgage lending.
  • A stronger rental market due to both local and international tenants
  • Ejar app introduced to act as a regulator between all parties resulting in an increase in transparency and trust.

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Future outlook

  • Continued sector growth with expectation that the targeted 70% ownership rate for nationals will be achieved.
  • Pivoting to changing demands in residential assets, driven by the young demographic of Saudi nationals.
  • Collaboration between the public and private sectors with a focus on residential assets within Giga programmes
  • Innovation in supply chain, construction, and finance arrangements
  • Increased impact of AI and digitalisation
  • Greater international investment and foreign ownership of assets.

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