The Ministry of Housing has launched 21 initiatives as part of the Kingdom’s “National Transformation Program 2020,” which was approved by the Saudi government, with an estimated cost of 59.2 billion riyals.
Among the most important initiatives are appropriate solutions for the use of government-owned unused or unproductive land, loan guarantees for real estate financing (excluding down payments), and involving major private landowners in the development of housing units to achieve the desired housing goals and generate financial returns for landowners.
The following are the housing initiatives in the "National Transformation Program 2020":
1- Devising appropriate solutions for the use of government-owned unused or unproductive land through a land swap process involving four ministries: the "Ministry of Defense," the “Ministry of Education,” the ”Ministry of Labor,” and the ”Ministry of Transport,” with the aim of assisting the ”Ministry of Housing” in developing and providing affordable housing units.
2- Loan guarantees: Mortgage financing (excluding the down payment). This guarantee is provided to private-sector employees at small and medium-sized enterprises that are not creditworthy with banks; this segment is currently ineligible for loans due to the associated risks, and this initiative will make mortgage financing available to them.
3- Involving major private landowners in the development of residential units (such as family-owned companies) to achieve the desired housing goals and generate financial returns for landowners.
4- Issuing sukuk to re-secure the cash flow for the "Real Estate Development Fund."
5- Cooperative housing: Leveraging community cohesion and collective purchasing power to empower and develop cooperative housing associations to build homes at lower costs compared to market prices.
6- A savings program to enable applicants to save a portion of the cost of owning a suitable home.
7- A program for the review, approval, and monitoring of off-plan sales projects.
8- Promoting innovative industrial solutions, in collaboration with "King Abdulaziz City for Science and Technology" and the “Ministry of Municipal and Rural Affairs,” to establish building codes and engage international technical service providers in the housing sector, thereby improving energy efficiency and waste management.
9- Encouraging private-sector developers by issuing fast-track permits, in collaboration with the "Ministry of Municipal and Rural Affairs," and providing the necessary financing, in collaboration with private lenders and the “Saudi Arabian Monetary Authority,” to develop affordable housing projects on private land and reduce the capital expenditures borne by the government.
10- Convert the "Real Estate Development Fund" into a financial institution to fill the gap in the real estate financing sector, making the fund the executive arm of the “Ministry of Housing.”
11- Cooperation between the "Ministry of Housing" and the “Ministry of Finance” to facilitate housing loans from banks for government employees.
12- Empower the "Ministry of Housing" to establish and construct power generation plants (conventional and municipal) for housing projects.
13- Regulating urban density.
14- A tax imposed on undeveloped plots of land located within urban boundaries.
15- Centralize the procurement of essential raw materials, such as steel and cement, to reduce construction costs by achieving economies of scale that benefit developers and contractors.
16- Forming partnerships with private-sector developers, such as "Al-Argan Projects Company" and others, to utilize government-owned land and thereby develop large-scale housing projects at affordable prices.
17- A national data center that will serve as an official, specialized source for all information related to the housing market.
18- A center to facilitate the work of private-sector developers by coordinating with developers and government agencies and reviewing regulations and laws related to the development process.
19- An electronic platform to facilitate the rental housing market.
20- A real estate authority to regulate the activities of developers, financiers, and other stakeholders, and to implement the Ministry’s various policies.
21- Establishing a practical framework to regulate owners" councils and unit allocation.
It should be noted that the Saudi "Council of Ministers“ decided at its last session, held at Al-Salam Palace in Jeddah, to approve the ”National Transformation Program 2020,“ one of the programs under ”Vision 2030.“
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National Transformation Program Initiatives "Ministry of Housing“ |
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| Number | Initiative | Amount (billion riyals) |
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| 1 | Developing appropriate solutions for the use of government-owned unused or unproductive land through a land swap process involving four ministries—the Ministry of Defense, the Ministry of Education, the Ministry of Labor, and the Ministry of Transport—with the aim of assisting the Ministry of Housing in developing and providing affordable housing units. | — | ||||
| 2 | Loan guarantees: Mortgage financing (excluding the down payment). This guarantee is provided to private-sector employees at small and medium-sized enterprises that are not approved by banks. This segment is currently not eligible for loans due to the associated risks, and this initiative will make mortgage financing available to them. | 2.81 | ||||
| 3 | Involving major private landowners in the development of residential units (such as family-owned companies) to achieve desired housing goals and generate financial returns | 1.80 | ||||
| for landowners. | ||||||
| 4 | Issuance of sukuk to re-secure the cash flow for the Real Estate Development Fund. | 0.29 | ||||
| 5 | Cooperative Housing: Leveraging community cohesion and collective purchasing power to empower and develop cooperative housing associations to build homes at lower costs compared to market prices. | 1.30 | ||||
| 6 | A savings program to enable applicants to save a portion of the cost of owning a suitable home. | 20.05 | ||||
| 7 | Program for reviewing, approving, and monitoring off-plan sales projects. | 0.03 | ||||
| 8 | Promoting innovative industrial solutions (in collaboration with King Abdulaziz City for Science and Technology and the Ministry of Municipal and Rural Affairs to develop building codes, and international technical service providers in the housing sector) that improve energy efficiency and waste management. | 0.09 | ||||
| 9 | Incentivizing private-sector developers through the issuance of fast-track permits (in collaboration with the Ministry of Municipal and Rural Affairs) and providing the necessary financing (in cooperation with private banks and the Saudi Arabian Monetary Authority), with the aim of developing affordable housing projects on private land and reducing capital expenditures incurred by the government. | 18.00 | ||||
| 10 | Convert the Real Estate Development Fund into a financial institution to fill the gap in the real estate finance sector, making the fund the executive arm of the Ministry of Housing. | 0.17 | ||||
| 11 | Cooperation between the Ministry of Housing and the Ministry of Finance to facilitate housing loans from banks for government employees. | — | ||||
| 12 | Enabling the Ministry of Housing to establish and construct power generation plants (conventional and municipal) for housing projects. | — | ||||
| 13 | Regulation of building density. | 0.02 | ||||
| 14 | Tax imposed on undeveloped plots of land located within urban boundaries. | 0.11 | ||||
| 15 | Ensuring centralized procurement of basic raw materials such as iron and cement to reduce construction costs by achieving economies of scale that benefit developers and contractors. | 0.09 | ||||
| 16 | Forming partnerships with private-sector developers (such as Al Argan Projects, Dar Al Arkan, Emaar, and other companies) to utilize government-owned land and thereby develop large-scale, affordable housing projects. | 13.50 | ||||
| 17 | A national data center that will serve as an official, specialized source for all information related to the housing market. | 0.09 | ||||
| 18 | A center that facilitates the work of private-sector developers by connecting them with government agencies and reviewing regulations and laws related to the development process. | 0.06 | ||||
| 19 | An online platform that facilitates the housing rental market. | 0.13 | ||||
| 20 | A real estate authority to regulate the activities of developers, financiers, and other stakeholders, and to implement the Ministry’s various policies. | 0.32 | ||||
| 21 | Establishing a workable framework for regulating owners" councils and unit allocation. | 0.30 | ||||
| Total | 59.17 | |||||
