Housing Minister Majid Al-Hogail revealed that the ministry’s vision and mission focus on two main pillars: enabling demand and supporting supply, from which numerous related initiatives emerge to support the achievement of this goal, adding that to ensure the successful achievement of its goals, the Ministry has supported these two pillars through three measures: research, studies, and public awareness campaigns; support for planning, organization, and oversight; and the sustainability of the Ministry’s resources through funding and investment.
Land Fee Regulations Submitted to the Expert Committee
In his speech during the opening of the Saudi International Real Estate Conference (SAIRC), which was held last week in Riyadh, Al-Hogail confirmed that the Ministry of Housing had prepared the regulations regarding fees for undeveloped land and submitted them to the Expert Committee of the Council of Economic Affairs, confirming that the system is in its final stages and noting that the new regulations for vacant land fees have been given a timeframe of up to six months for approval.
Al-Hogail denied the validity of the new draft legislation on white land fees that recently appeared in the media, emphasizing that the legislation is considered valid only after approval, and that they are currently in the final review stage; once approved, an official announcement will be made. Al-Haqil noted that premature statements hold no value due to a lack of accuracy."
New Projects by the Ministry of Housing
On another note, Al-Hogail revealed that the Ministry is preparing other housing projects in addition to those already announced, noting that the Hafar Al-Batin projects are part of the Ministry of Housing’s initiatives and will be followed by other areas offering various types of housing, including apartments, land plots, and residential villas, adding that developers are currently working on developing some of the Ministry’s land plots, which will be allocated to citizens, and noting that the "Iskan" program has priorities based on the types, needs, and diversity of beneficiaries.
Al-Hogail emphasized that the Ministry receives unlimited support from the wise leadership to provide suitable housing for every citizen eligible for housing, and based on that ongoing support, work has been carried out on planning, analysis, policy formulation, and program development in all areas according to specific timelines, By the grace of God, 100,000 housing units—including villas, apartments, and land plots—have been prepared, along with financing solutions that will be delivered over the course of the year at an average rate of 8,000 units per month to those eligible for housing support across all regions of the Kingdom, Since the beginning of this month, the Ministry has begun distributing units from the Hafar Al-Batin Governorate Housing Project, which provides integrated infrastructure and service facilities, The project consists of 900 housing units, and the distribution of other projects will follow, including housing projects in Dammam, Al-Khobar, Al-Ahsa, Al-Qatif, Al-Shannan, Riyadh Al-Khubara, and a number of other governorates across all regions of the Kingdom.
Britain, France, and China Join the "Housing" Circle
Regarding the reasons for selecting the United Kingdom, France, and China to sign agreements with the Kingdom to implement housing projects, he emphasized that the United Kingdom has legislation that enables it to assist beneficiaries, explaining that not every agreement signed is aimed at building homes but may instead be for implementing special savings programs that benefit citizens, and that the agreements vary according to the specific financing needs of each country, noting that some agreements are intended to develop systems and programs that benefit the Kingdom, particularly in the area of savings programs.
Al-Hogail described the Kingdom’s experience with South Korea and is considered a success story. He noted that Saudi citizens will have the right to choose among all products at different price points, adding that his ministry is currently working with the Ministry of Labor and Social Development on joint programs for low-income individuals, and noting that there are initiatives within the National Transformation Program that will be announced in detail, aimed at increasing the charitable sector’s contribution from 1% to 10%..
Diverse Solutions Boost Demand for Housing
In his speech, Al-Haqil outlined the solutions addressed in the Ministry’s programs, which aim to diversify and integrate the proposed solutions, facilitate the process for citizens, and boost demand for housing by providing the best affordable financing options to help citizens become homeowners, Perhaps the most notable of these are savings programs designed to help those wishing to purchase a home build up the capital needed to do so, in addition to subsidized loans that offer flexible repayment terms, down payment guarantees, and reduced financing costs through loan guarantees, and encouraging the establishment of a secondary market for real estate financing. Supply-side solutions aim to increase the supply of housing units in the market, expand the available inventory, lower prices, accelerate delivery, and stimulate investment in the development sector, Among the most notable of these programs are imposing fees on undeveloped land to reduce the cost of the land component in housing projects, raising housing density coefficients in master plans—which positively impacts the reduction of per-unit housing costs, allocating a percentage of housing units for affordable housing in the planning of residential communities, land development, and inner-city revitalization, encouraging partnerships with the private sector to build affordable housing on Ministry-owned or privately-owned land and supporting developers by guaranteeing clients who are eligible for housing assistance, utilizing vacant housing and injecting it into the market; and promoting industrial solutions and non-traditional design and construction methods to increase the housing supply and reduce prices.
The Ministry’s shift toward becoming a supporter and regulator
Al-Hogail stated that the Ministry has taken a strategic step of the utmost importance, which lies in the shift from being an implementer and developer to a supporter and regulator, noting the Ministry’s commitment to ensuring the success of the partnership with the private sector to provide various housing products, It has therefore introduced incentives to encourage real estate investment aimed at providing affordable housing and has developed partnership mechanisms that meet the aspirations of real estate developers and overcome the obstacles they previously faced, Al-Hogail noted that the establishment of the Unified Center for Developer Services "Itmam" is one of the most important steps that will significantly contribute to encouraging developers, expediting procedures, and facilitating all necessary services for residential projects carried out by real estate development companies. In this regard, the Ministry has signed a number of agreements with real estate developers from both inside and outside the country, and this approach will continue to achieve our goals of advancing the housing sector and serving all citizens.
%7 Real Estate Sector’s Contribution to GDP
For his part, Saleh Al-Afaleq, Vice Chairman of the Council of Saudi Chambers, delivered a speech in which he emphasized that recent years have witnessed massive real estate projects that have brought about a radical change in the Kingdom’s economic and social life, adding that these achievements were reflected in balanced growth across all sectors of the national economy. He noted that the real estate sector’s contribution reached 7% of the gross domestic product in 2015, and noting that despite the real estate development the sector has witnessed, it still has the capacity to absorb further investments.
For his part, Hamad Al-Shuwaier, Chairman of the Real Estate Committee at the Council of Saudi Chambers, said that the establishment of a supreme real estate authority would serve as a reference point for real estate affairs, responsible for regulation, legislation, and oversight, monitor its development, and address its obstacles. He added that a royal decree was issued to the Ministry of Housing to complete the task of establishing the National Real Estate Authority, to define all details regarding the authority’s role, objectives, organizational structure, and relationship with various entities.
