The Ministry of Housing has reaffirmed its intention to establish a company specializing in real estate development, with the aim of building in areas where developers are reluctant to operate, such as villages, small towns, and provinces; this is to ensure the availability of suitable housing anywhere in the Kingdom, This announcement was made during a workshop organized by the Ministry as part of the “Restatex – Cityscape 2017” real estate exhibition in Riyadh.
For his part, Ahmed Mandoura, director of the Private Sector Partnership Program at the Ministry of Housing, explained that since last April, the ministry has signed 29 off-plan sales projects with 18 developers in 13 cities to build 60,600 housing units, representing 55 percent of the total. He said: «We are working hard during this period to finalize many agreements to build the remaining 110,000 housing units—consisting of villas and apartments—suitable for Saudi families.» He explained that the Ministry is seeking to accelerate the delivery of housing and financing products under the “Sakani” program, which includes land, subsidized mortgages, and ready-to-move-in and off-plan housing units.
He explained that the incentives offered by the Ministry to developers, which cover four cost categories, are: Providing land at a low cost, which reduces the value of a housing unit by 25 to 30 percent compared to its market value; covering the financing costs required by the developer; providing liquidity to the developer in the event that the project’s sales are not completed, covering marketing and sales costs if the process takes a long time—as the Ministry guarantees the purchase of the units upon project completion—and covering construction costs, as the Ministry seeks to adopt new construction technologies.
Regarding the Ministry’s future plans, Mandoura said that the Ministry of Housing aims to implement the full plan with the goal of completing at least 60 percent of the total 1.6 million housing units on the waiting list over the next five years, noting that the partnership with the private sector aims to help developers reach the target price range for housing units—which is commensurate with beneficiaries’ financial capabilities—ranging from 200,000 to 700,000 riyals.
