His Excellency Minister of Housing Majid bin Abdullah Al-Hogail confirmed that the Cabinet’s approval, at its meeting today, Monday, chaired by the Custodian of the Two Holy Mosques King Salman bin Abdulaziz Al Saud—may God protect him — of the resolution to establish the General Real Estate Authority is in line with the strategic objectives of the Kingdom’s Vision 2030 and the National Transformation Program 2020, as part of efforts to improve the performance of the real estate sector and increase its contribution to GDP.
Encouraging investment in the sector
During a press briefing, His Excellency the Minister praised the support the initiative to establish the General Real Estate Authority received from the Council of Economic and Development Affairs, which culminated in its approval by the Cabinet yesterday, so that it may, in turn, provide a range of services to citizens, developers, and relevant entities, and undertake the regulation, supervision, and development of the non-governmental real estate sector to enhance its efficiency and encourage investment in it, in line with economic and social development goals, noting that this is an extension of the continued support from the wise leadership for the regulation and development of the real estate sector.
Independence of the General Real Estate Authority
His Excellency stated that the Authority will enjoy financial and administrative independence and possess broad powers to propose amendments and improvements to all regulations, bylaws, and policies related to real estate activities and to submit them for the necessary follow-up, develop the necessary plans to exercise its functions, establish standards for real estate activities, and license and supervise them, in addition to encouraging investment and providing an environment conducive to fair competition in this field, and coordinating with relevant authorities to ensure the integration of real estate infrastructure and the achievement of related national objectives, policies, and strategies.
Key Functions of the Authority
His Excellency the Minister of Housing noted that the Authority will work to raise awareness of real estate sector regulations and activities, monitor real estate sector indicators to ensure its stability and balance, and follow up on the implementation of agreements related to real estate activities concluded between the Kingdom and other countries, in addition to providing training and qualification for those licensed to engage in real estate activities, conducting research, studies, and statistical analyses in this field, establishing the necessary controls to regulate and monitor real estate advertisements, and establishing an electronic portal containing real estate databases that are periodically updated and made available to interested parties.
8.3% Contribution of the Real Estate Sector
Al-Hogail emphasized the need to regulate and upgrade the real estate sector so that it becomes an attractive and integrated sector, given its significant impact on the Kingdom’s economy, noting that official statistics released in 2016 indicate that the real estate sector’s gross domestic product (GDP), at 2010 constant prices, amounted to approximately 128 billion riyals, while the compound annual growth rate (6%) for the period between (2012) and (2016), while the relative contribution of the real estate sector to GDP at constant prices for (2010) was approximately (4.9%), accounting for (8.3%) of total non-oil GDP.
(39.5) thousand establishments in the real estate sector
He noted that these statistics reflect the utmost importance of the real estate sector and the extent of its positive impact, as the multiplier effect of investments in the real estate sector amounts to approximately (8.7) riyals in direct and indirect economic output, while the multiplier for value added is approximately (5.2) riyals. This impact extends to related businesses and institutions, as statistics indicate that the number of businesses operating in the real estate sector reached approximately (39.5) thousand, (90%) of which are small enterprises, accounting for approximately (4.1%) of the total number of enterprises in 2015. According to the 2015 Annual Economic Survey of Enterprises, the number of Saudi employees in real estate activities reached approximately (74.5) thousand individuals, equivalent to approximately (48%) of the total workforce in this sector. The Authority aims to increase the proportion of Saudi workers in the real estate sector, noting that this comes against the backdrop of a population growth rate of (2.54%) in the year (2016) and an increase in the proportion of the population in the (15) to (34) age group to approximately 53%..
