Saudi Arabia’s approval of a privileged residency scheme for expatriates will drive demand for real estate, according to a senior Knight Frank executive.
The Saudi cabinet on Tuesday approved a special residency scheme, similar to green card systems applicable in other countries, aimed at attracting wealthy and high-skilled expats.
Read: Saudi cabinet approves special residency scheme for expats
Crown Prince Mohammed bin Salman first announced the idea for a long-term residency program in 2016 as a part of the plan to reduce the Kingdom’s reliance on oil revenues. The new scheme eligible expats can apply for an indefinite stay or a one-year renewable residency as well as own properties. The government will detail the scheme’s rules within 90 days after the cabinet’s approval.
“The newly approved special residency scheme in Saudi Arabia would reinforce confidence among expatriates. It will provide the beneficiaries with greater comfort around their mid-to long-term future, allowing them to better plan their lives within the Kingdom,” Raya Majdalani, Research Manager, Knight Frank, Dubai, told Argaam.
“Given a greater feeling of permanence, we can, therefore, expect to see expatriates, who are under the privileged residency schemes, encouraged to own properties in the Kingdom. Noting that the new regulations would also entail the ability to own real estate as per the announcement,” she noted.
Demand for real estate has been dented following the departure of expatriates after the introduction of expat work permit fees and dependent fees. However, the government has approved a scheme to reimburse some of the companies.
Read: King Salman approves SAR11.5 bln package to ease expat fee costs
“This [residency scheme] would counteract some of the pressures on expatriates that were triggered by the introduction of levies and the implementation of a plan restricting employment in certain sectors to nationals only," Majdalani said.
These measures have prompted the departures of expats, which has, in turn, significantly impacted demand for residential assets in key cities exerting pressures on the level of rents particularly in compounds where demand is mainly driven by non-Saudis, she added.
Write to Parag Deulgaonkar at parag.d@argaamplus.com
Comments
{{DisplayName}}
{{ElapsedTime}}