Transferring the stock exchange to the Real Estate Authority. The beginning of a more transparent market

D. Imad Al-Abdulrahman

<The announcement by the Minister of Justice that the necessary steps to transfer the real estate exchange from the Ministry of Justice to the General Authority for Real Estate represents a pivotal shift in the history of the Saudi real estate market. The move is not only about redistributing roles between two government entities, but it is a transition towards a more mature and transparent model for trading real estate assets, and a regulatory structure that paves the way for the establishment of a sophisticated investment market capable of absorbing the rapid growth of the sector.

The decision comes at a pivotal time in the history of the Saudi real estate market. <The decision comes at a time when urban development and government spending on infrastructure is accelerating, while the contribution of the real estate sector to GDP is rising year after year, and the volume of trading is increasing at an unprecedented rate. This economic movement has made the need for a real estate trading platform that operates with unified standards, provides transparent data, and supports investors" decisions with real-time reports capable of clearly reading market trends. Therefore, the timing of the stock exchange transfer seems ideal; it coincides with the market reaching a stage where it needs a specialized regulatory body that deals with real estate as an economic asset that can be traded, analyzed, and measured. But... why the Real Estate Authority? <Because it has a broad legislative and regulatory umbrella that includes supervising real estate practices, regulating brokerage and advertising, and standardizing databases and professional standards. This makes it the entity closest to the market and able to understand its needs. The presence of the stock exchange under the supervision of the Authority means unifying the regulatory and legislative reference, accelerating the updating of regulations according to market developments, controlling trading, advertising and brokerage operations, reducing data disparity, and increasing the accuracy of real estate indicators.

The transition of the exchange becomes a logical step to form a "centralized platform“ managed by standards similar to capital markets, but commensurate with the nature of real estate assets.

<The regulatory impact of this step goes beyond the transfer of tasks and organizational steps, as this shift will lead to the reshaping of the legal environment for real estate practices, starting from the standardization of regulatory guides, to enhancing compliance and governance, and raising the professionalism of brokers and developers. It also minimizes overlap between entities and gives the market a single reference point that is more accurate and responsive to the day-to-day operations of trading, development and marketing.

The importance of the move is not limited to the real estate industry. <The importance of the step is not limited to the regulatory aspect, but extends to the macro-economy, as it is expected to make a clear shift in several aspects, the most important of which is raising the contribution of the real estate sector to the GDP Suppress the presence of accurate data and a unified trading platform, the circle of economic activity related to real estate, from financing and construction to logistics and supply chains, pushing the contribution of the sector towards higher levels and increasing capital efficiency as the availability of transparent data reduces investment waste resulting from decisions based on incomplete information. Capital will be directed to projects that are truly feasible, increasing the efficiency of the distribution of investments within cities and regions.

In addition to improving the business environment, the sector's contribution will be pushed to higher levels. <In addition to improving the business environment represented in the speed of procedures and clarity of regulations, which will enhance the competitiveness of the Saudi market compared to regional markets, and attract regional and international investment entities looking for a mature and safe trading environment, in addition to opening the door to new investment products, as the presence of the real estate exchange under the umbrella of the Authority represents an opportunity to build a deeper and more diversified investment market through the emergence of modern investment tools such as partial ownership of real estate units, short and long-term real estate trading products, certified instant valuations, and institutional trades based on clear financial criteria. Despite all these positives, we must point out several challenges that deserve to be addressed, which we are sure have not escaped the minds of those responsible for the transition process. Despite the expected gains, the success of the experiment requires high technical readiness to link between systems, train and qualify brokers and developers on new trading mechanisms, build standardized data models on which financing and investment entities rely and ensure the accuracy of real-time updating of indicators and prices.

Moving the real estate exchange from the current system to the new system requires a high level of technical readiness. The transfer of the real estate exchange from the Ministry of Justice to the General Authority for Real Estate is a strategic step that goes beyond being a governmental measure, to open the door to a new stage of organization, transparency and economic maturity. It is a step that gives the Saudi real estate market an opportunity to establish a professional trading environment that attracts investors, expands the base of investment products, and puts real estate on the road to being one of the most important tools to diversify the national economy. It is the beginning of a clearer real estate scene ... more capable of growth ... and more attractive to both institutional and individual investment.

Economic Journalist