Real estate investments are expected to rise by 35% by the end of this year to reach 500 billion riyals

The British magazine World Finance reported that the Saudi budget rose in the current year 2014 to 248 billion riyals, compared to 157 billion riyals last year, and its focus on the social dimension, including the provision of adequate housing, reflecting the real desire to solve the housing issue and revitalize the real estate sector, coinciding with a set of legislation and laws corrective to the path of this promising market.

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The attractiveness of the real estate sector
The British magazine World Finance confirmed that in light of the latest legislation taken by a number of government bodies, such as the Monetary Agency and the Real Estate Development Fund, the first quarter of this year is evidence of the increasing demand of investors for the real estate sector, and that it has become more attractive than the stock market, which has achieved positive results during the past period, to benefit from the sustainable growth in the real estate market, especially in the construction sector and government and private projects.

Experts describe the recent government legislation, including the licensing of five companies and financial institutions by the Monetary Agency to practice the implementation of mortgage schemes, as ”positive”, pointing out that it represents a real opportunity to increase the ability of citizens to own housing units, especially as it facilitates financing operations for citizens that are compatible with Islamic law and guarantees the rights of all parties.
A safe haven
Despite the continuous challenges faced by the stock market and the real estate market over the past ten years, investment in the real estate sector has achieved positive results better than investment in some other sectors that incurred losses during the past five years, paving the way for it to be a safe haven for investors in the Saudi market.
Economic studies expect that investments in real estate and real estate transactions during the current year 2014 will increase by 35% compared to last year, reaching about 500 billion riyals in all regions of the Kingdom, driven by new legislation and procedures, which ensure the partnership of the government sector with the private sector to achieve a positive indicator, to ensure the continuous growth of the real estate sector, and the desire of developers and investors to create real investment opportunities in this industry.

Experts in the real estate sector say that the real estate market is still a strong destination for investors and dealers in the market, adding that the launch of the electronic platform «Ejar» effectively contributes to the balance between supply and demand, which motivates the private sector to invest in the rental sector of residential units, thus providing more residential units for rent at fair prices for tenants, stressing the real estate regulations that will be enacted by the Ministry of Housing and the Real Estate Development Fund during this year will contribute to drawing a positive relationship to the real estate sector, and enhance the opportunities for citizens to own housing units.

Political and economic stability
The Saudi government continues its efforts to follow an expansionary strategy to diversify the economy, to maintain strong economic growth, and this is evident in the spending items in the current budget and the huge financial allocations to achieve long-term sustainable development, investing in infrastructure projects and focusing on the economic and social aspect, and encouraging the private sector to follow positive and interactive investment policies, especially in the housing and real estate sector.

All these factors are supported by the state of political and economic stability enjoyed by the Kingdom, compared to other countries in the region that are witnessing political turmoil and security chaos, making the Saudi economy in general one of the largest economies in the region to grow and stabilize in the short and long term, and a safe haven for foreign investments.
Real estate growth rates
The real estate sector is expected to maintain growth rates touching 7% during the current and next year, driven by continued demand that exceeds the supply of housing, especially since the Kingdom is one of the largest countries in the world in terms of population growth, in addition to the credit and financing facilities taken by the government.
Real estate specialists confirm that the approval of a number of mortgage, financing and real estate rental programs, nominates real estate financing to rise by at least 5% until the end of this year, especially since these programs have already started to be applied on the ground, and they are a strong boost to the growth and recovery of the real estate sector.
The magazine concludes its report by saying that the real estate sector is the largest in the GCC countries, and the availability of financial liquidity is a strong and essential support for the revitalization of the real estate market and the construction market, and if the outlook is still positive, there are a number of factors that make it more attractive, most notably the high demand, the huge housing projects in which the private sector is actively involved, as a large number of investors and developers have recently turned to buying land to build residential complexes, given the increasing demand for small and medium-sized housing units, and all these developments and developments maintain