{"id":20099,"date":"2018-03-25T15:05:11","date_gmt":"2018-03-25T12:05:11","guid":{"rendered":"http:\/\/www.amlak.net.sa\/home\/?p=20099"},"modified":"2018-03-25T15:05:11","modified_gmt":"2018-03-25T12:05:11","slug":"%d8%b1%d8%a4%d9%8a%d8%a9-%d9%85%d8%b9%d8%a7%d8%b5%d8%b1%d8%a9-%d8%ad%d9%88%d9%84-%d9%85%d8%b3%d8%aa%d9%82%d8%a8%d9%84-%d8%a7%d9%84%d8%a7%d8%b3%d8%aa%d8%ab%d9%85%d8%a7%d8%b1-%d8%a7%d9%84%d8%b9%d9%82","status":"publish","type":"post","link":"https:\/\/amlak.net.sa\/en\/20099\/","title":{"rendered":"A contemporary vision on the future of real estate investment according to the National Transformation Program and the Kingdom's Vision 2030"},"content":{"rendered":"

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Prepared by Turki bin Saad Al-Bawardi<\/strong><\/p>\n

When the Council of Economic and Development Affairs set the year 2030 to be the year of completion of achieving the renaissance of the Kingdom of Saudi Arabia and putting it on the path of industrial and technological countries based on the goals of Vision 2030 based on the National Transformation Program, it thus sends 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 ignored the review of the national transformation programs and initiatives, prioritizing, studying the impacts, and setting a timetable for correction, so everyone was shocked after that by a number of decisions that confused their business and stopped their projects, and the cost of correction was very high.<\/p>\n

Why real estate?<\/strong><\/p>\n

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!<\/p>\n

Importance of the drug<\/strong><\/p>\n

The importance of real estate lies in its critical role in the economy. In the industrialized world, real estate has four pillars that make up its influential strategic trajectory.<\/p>\n

First<\/strong>: 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.<\/p>\n

Second<\/strong>: A major source of job creation for \u201cnationals\u201d such as engineers, architects, surveyors, builders, financial and legal advisors, facility managers, and many others.<\/p>\n

Third<\/strong>: A factor that attracts 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.<\/p>\n

Fourth<\/strong>: A source of income for the state treasury through taxes that vary according to the type of property and the status of the owner.<\/p>\n

Saudi real estate in its current state does not play an effective role in the economy as it does in Western and Eastern countries. On the contrary, it is an obstacle to the state and drains huge amounts of the budget as compensation for expropriation to build infrastructure projects or purchase land for 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 it is rent or a loan. As for the value-added tax, it is nothing compared to the taxes imposed on real estate in first world countries.<\/p>\n

The National Transformation Program (NTP), announced by the Council of Economic and Development Affairs in June 2015, has become a fundamental basis for business. 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.<\/p>\n

The National Transformation Program is linked to lifestyles, so it establishes the post-2020 phase, as it is known that there are three generations currently living:<\/p>\n

Millennials who are now between the ages of 21-34<\/p>\n

The generation born after 2000<\/p>\n

Tomorrow's aging generation, who today are between the ages of 35-49<\/p>\n

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 related to social patterns, which will create opportunities for real estate investment are as follows:<\/p>\n

Youth (male and female)<\/strong><\/p>\n