Prepared by Turki bin Saad Al-Bawardi
When the Council of Economic and Development Affairs set 2030 as the year to complete the achievement of the renaissance of the Kingdom of Saudi Arabia and put it on the path of industrial and technological countries based on the goals of Vision 2030 based on the National Transformation Program, it sent an explicit message to the private sector to immediately start restructuring the sector to comply with the goals of the Kingdom's vision, and during a year and a half most of the private sector neglected to review the programs and initiatives of the national transformation, identify priorities, study the impacts and set a timetable for correction, so everyone was then shocked by a number of decisions that confused their business and stopped their projects, the cost of correction after that was high c
Why real estate?
Real estate is everywhere, on roads, in hotels, in resorts, in sports clubs, in stadiums, in hospitals, in schools, in factories, in offices, in towers, in malls, in airports, in farms, in rest houses, in government buildings, in residential and commercial complexes, in infrastructure. In short, it is everything around us!
The importance of real estate First: An enabler of economic activity by providing spaces for companies and factories to operate, providing and developing land to build schools, hospitals and other projects, and providing high-quality commercial infrastructure that attracts capital and creates a good reputation for the country as a vital center for investment. The first is an enabler of economic activity by providing space for companies and factories to operate, providing and developing land to build schools, hospitals and other projects.
Second: A major source of job creation for “nationals” such as engineers, architects, surveyors, builders, financial and legal advisors, facility managers and many others. Third.
Third: An attraction factor for foreign and local investors to invest in real estate, real estate funds and others, whether the investor is an individual or an institutional entity, which helps to expand commercial and residential activities. Fourth
Fourth: A source of income for the state treasury through taxes that vary according to the type of property and the status of the owner.
<Saudi real estate in its current state is not considered influential in the economy, as is the case in the western and eastern world, it does not play an active role in the Saudi economy; on the contrary, it is an obstacle to the state and drains huge amounts of the budget as compensation for expropriation to establish infrastructure projects or purchase land to establish service projects; it is a factor of harm to the citizen for reasons including his inability to own a home due to the inflation of the value of residential real estate and also because it deducts a large part of his salary, whether rent or loan. As for the value-added tax, it is nothing compared to the taxes imposed on real estate in first world countries.
<The National Transformation Program (NTP) announced by the Council of Economic and Development Affairs in June 2015 has become a fundamental basis for business, and traditional investment that ignores the goals and initiatives of the NTP is no longer acceptable. The Kingdom's Vision 2030 is fundamentally based on the National Transformation Program.
The National Transformation Program is linked to lifestyles, so it is establishing the post-2020 stage, as it is known that there are three generations currently living: Millennials.
Millennials, whose ages today are between (21-34)
The generation born after 2000
Tomorrow's aging generation, who are today between the ages of 35-49
<The success of real estate investment during the next decade depends on the study of the social path and the economic path, for example, major shifts in the social pattern is one of the most important positive effects of the National Transformation Program, and it is necessarily known that investment in commercial and residential real estate is based on consumer behavior, the type of property suitable for the nature of the expected lifestyle. The study of the social path until 2030 raises the percentage of investment success, the most important expected outputs of the National Transformation Program associated with social patterns, which will create opportunities for real estate investment are as follows:
Youth (male and female) Seniors
Seniors: The exit of children from home and their independence will make a significant change in the lifestyle of the elderly, especially if we realize the impact of the economic path on the lives of young people, which may include delaying marriage, procreation, birth control, etc. Real estate opportunities lie in offering seniors housing products that include care services and a healthy environment.
Economic trajectory and real estate investment: When studying the national transformation programs and initiatives of government agencies, you will find that one of the profitable real estate opportunities in the coming period will be in the tourism sector. Tourism.
Tourism: It is considered one of the promising sectors stipulated by the second pillar of Vision 2030, a prosperous economy.
In the National Transformation Program, the Tourism and Heritage Authority has set a number of goals, including:
First Strategic Objective: First Strategic Objective:
<Create and develop new integrated tourist destinations, sites, islands, and entertainment cities for all family groups, and encourage the private sector to invest in and operate them.
Strategic Objective Four: Increase and develop hospitality facilities and tourism services.
Tourism is of two types: Tourism is of two types:
<Religious tourism and general tourism: In the first axis of Vision 2030 A Vibrant Society, this is mentioned (working to revitalize the sites of national, Arab, Islamic and ancient heritage and enable everyone to access them). The establishment of an Islamic museum.
(Establishing an Islamic museum that will be a major station for our citizens and guests to learn about the ancient Islamic history). Real estate investment
Real estate investment in the tourism sector will be completely different from the previous situation as the state's orientation, as announced, is to open the way to attract tourists from all over the world throughout the year and this means that Eastern and Western societies are permanently integrated into Saudi society and this requires the provision of tourism real estate products that accommodate the culture and customs of foreign tourists to provide them with a flexible life and a safe environment. Real estate investment in the tourism sector will be completely different from what it was in the past.
Possible and not impossible When the real estate sector absorbs the four aforementioned axes and the following factors are available, it will not be surprising in the future that the real estate sector will present itself as the most important economic tools and play a huge and pivotal commercial role.
<(Each of us is responsible for building our own future, where each of us builds our self and our abilities to be independent and active in our society and plan for our financial and practical future). This provides investment opportunities to provide high-end, high-quality entertainment products that are a haven for relaxation and weekend enjoyment.
