Amlak-Diyadh
Q1: How do you see the real estate reality in Riyadh now? A: The real estate situation is currently in a phase of anticipation, although the demand for residential real estate in the Kingdom, especially in major cities such as Riyadh, is steadily increasing, as the supply of housing units does not meet the increasing demand, which resulted in a significant increase in the value of rents and sales, due to several factors, the most important of which is the increase in local migration to the capital in search of job opportunities. The city of Riyadh represents about 24% of the Kingdom's population, with a population of more than five million people currently and expected to reach seven million in 2024 (Riyadh City Development Authority study). As the need for residential land increases, so will the demand for land for facilities, services and commercial complexes, which shows that the real estate reality in Riyadh is heading towards an increase in demand that needs to be planned before it turns into a crisis. It is very important that real estate investment is encouraged to participate in building real estate products that serve the final beneficiary and not land speculation.

<Q2: In your estimation as a real estate man, to what extent has the global financial crisis cast a shadow on the real estate market in the Kingdom, especially in Riyadh? A: The follower of the movement of the real estate market in the Kingdom did not notice a significant impact except in the early days of the crisis where there was a kind of caution and anticipation, and there is no doubt that the global crisis led to the detention of liquidity in banks, which affected the movement of buying and selling in all fields at that time, but the nature of the Kingdom and the great growth movement it is going through overshadowed this caution and anticipation, so the impact was positive with the shift of Saudi investments to the local market where local demand and the urban movement continued as it was and more, and investors went to the safe vessel that has proven over the years its strength, durability and resistance to financial shocks and tremors, namely

<Q3: Do you think that real estate is living a real recession crisis or is it starting to get rid of its effects, and that we could be on the threshold of a new launch phase towards real estate prosperity? What are your expectations? A: I can confirm from our daily practice and experience in this field that there is no recession at the moment, but on the contrary, there is prosperity and tangible real estate activity throughout the Kingdom, but the demand for real estate varies from one region to another depending on the location in relation to the city only, and in light of the largest budget in the Kingdom, there are many projects awaiting implementation, which will increase the demand for real estate. In addition, the imminent issuance of the package of real estate financing regulations, which is expected to increase the purchasing power of the citizen and increase the confidence of investors in the market as a result of the regulation resulting from the issuance of these regulations, thus increasing work and production, increasing the number of real estate financing companies and the entry of new investors in the real estate market, which contributes to the launch of a new phase towards real estate prosperity.

<Q4: Some note a stall in the movement of projects and the reluctance of investors to continue
Do you think this is due to the repercussions of the global financial crisis on local investors, which makes them reluctant to pump their money into these projects in light of the recession, or is there a real liquidity crisis among investors that makes them unable to complete their projects? How do you see the truth? A: We cannot say that it is a faltering, but a hesitation on the part of some, and this is not a phenomenon, as there are many projects going at a high pace, and I do not think that there is a liquidity crisis at the present time, as most of the projects were contracted after the global financial crisis, which shows that the financial crisis did not affect these investors, but in the past period there was a great rush to implement projects, and what some projects are witnessing now from the slowdown in implementation may be due to the hesitation of some investors or issues from the impact of some contractors affected by the high costs of building materials.

<Q5: Where do you think commercial banks stand in this “crisis” situation? Do you think they are currently ready to enter strongly to finance real estate projects, especially since they have huge liquidity looking for channels to employ and invest it? Or do you think that banks are waiting for the issuance of the mortgage system to be encouraged to enter strongly to finance real estate market projects? C: The slowdown of banks in financing real estate projects is very natural as a result of the conservatism resulting from the global crisis. However, this does not mean that banks have stopped completely, but rather they are selecting from the best developers who are able to fulfill their commitment to the banks. As for the issuance of real estate financing regulations, this will of course increase the appetite of banks to enter strongly into the real estate development market, and we as real estate professionals have called and are still calling for the importance of the speedy issuance of real estate financing regulations in order to encourage banks to enter into financing real estate housing development projects, which contributes to solving the suffocating housing issue suffered by the cities of the Kingdom, especially the capital, Riyadh.

Q5: What are your thoughts on the issue of real estate financing? <Q5: Do you have a final word? I say that the real estate market lacks regulation and protection of all parties working in it and the protection of the final beneficiary, which is the most important party in the whole matter, as it is required to activate the regulations related to the real estate sector and the rapid issuance of real estate financing systems, the most important of which is the implementation system. This is to popularize and support investment in this important sector that touches the most basic demands of the human being, which is housing. The construction movement in an organized legislative environment supports the generation of job opportunities for citizens and creates a good investment environment that attracts global and local investments.