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The US-Saudi Business Council expects government investment to continue in the residential real estate market to maintain the pace of building affordable housing projects.
The council said in a report that as supply continues to exceed demand, the need to build an additional 1.2 million houses at an estimated cost of SAR 657 billion over the next 10 years will be a challenge.
This will require a large number of investments and will provide a tremendous opportunity for international and local real estate developers as well as finance companies to achieve the Kingdom's vision of raising the proportion of Saudi household ownership to 70% by 2030.
The council noted that the growth in housing projects led to a recovery in the mortgage market in 2020, pointing out that the market was also pushed by the regulatory changes, increased development projects from the Ministry of Housing, and other initiatives.
The decrease in the number of contracts awarded during 2020 will lead to a temporary reduction in construction activity in the short-term, the report indicated, noting that the recovery of construction activities will require strengthening the workforce.
The construction contracts granted recovered significantly during Q4 2020 compared to Q3 2020, as Roshn Real Estate Co., a subsidiary of the Public Investment Fund (PIF), has awarded several contracts for its first neighborhood project in Riyadh, which includes 30,000 housing units, to a number of local and international contracting companies.
The council also predicted that the value of completed residential construction projects will increase to SAR 51.4 billion this year, assuming that the projects will continue on schedule.
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