Growing urbanization, shifting demographics, continued economic growth and diversification in Saudi Arabia are driving an unprecedented expansion in demand for housing for middle-income families. This looks set to continue as the country’s demographic ‘youth bulge’ enters the workforce and moves toward middle-income status, looking for homes of their own. This creates an unprecedented opportunity for private investment in the developing infrastructure of the country and Abdul Latif Jameel is one of those helping to bridge the gap between supply and demand.
According to a report from global real estate consultancy JLL*, two-thirds of the Saudi population now earns between 6,000 and 20,000 riyals per month (approximately US$ 1,600 to US$ 5,000), yet just 30% of Saudis own their own homes, compared to a worldwide average of 70%.
In 2015, the number of residential transactions in Saudi Arabia fell 5% year-on-year*. At the same time, rents have increased sharply, particularly in Jeddah and Riyadh. Experts have identified near-term demand for more than 400,000 new homes for middle-income households, which make up over 60 per cent of all households in the country*.
In an exciting move, the Government is now placing a greater emphasis on working with the private sector to tackle the housing shortfall. Regulatory changes introduced in line with Vision 2030 and the National Transformation Program should accelerate the supply of affordable housing aiming to deliver 1.5 million homes over the next seven years as part of wider plans to double the real estate sector’s contribution to Saudi Arabia’s GDP to 10% by 2020.
Abdul Latif Jameel Land, the company’s land and real estate development division, looks set to play a key role in achieving this ambition, helping to deliver high-quality housing across Saudi Arabia, with a broad range of initiatives already underway, including recent announcements of J│ONE. Its previous projects in the country showcase its abilities to create high-quality, property solutions.
In addition, its partnership with Dubai-based developer Emaar Properties, ‘Emaar-Jameel’ will look to build a number of large-scale developments featuring residential properties, commercial buildings, retail outlets, and leisure and recreational facilities.
As well as addressing the housing shortage, these projects will also generate jobs and investment, and enhance the overall infrastructure of the area.
As Saudi Arabia rises to the housing challenge, Abdul Latif Jameel Land looks well placed to work with the Government and other partners to strengthen the future of the country’s housing sector and be at the very heart of the solution.
* Middle income housing in the Middle East and North Africa – progress and priorities, Jones Lang Lasalle, 2015 [accessed August 31, 2016]