Field of dreams
A forecast of six real estate trends in Saudi Arabia for 2011 reminds Kipp of a Kevin Costner where unknown forces urged him to build a baseball field that will attract other-worldly players.
March 28, 2011 4:38 by Precious de Leon
Greater integration across the Kingdom, said the report, will promote economic stability, job growth and ultimately benefit the real estate markets in Saudi Arabia. New demand drivers, like the improvement of transportation systems and infrastructure projects, will create investment opportunities and increase the connectivity and attractiveness of the market.
This outlook is coupled with Jones Lang LaSalle’s six key predictions for real estate in Saudi Arabia this year:
1. Stimulus package will help to build communities
For 2011, Saudi Arabia announced the largest budget ever at $155 billion, which was more recently increased to over $267 billion (SR1 trillion). The implementation of the budget will provide significant support to the real estate sector, on both the supply and demand sides. The Custodian of the Two Holy Mosques King Abdullah bin Abdulaziz Al Saud has issued a Royal Decree aiming to improve living conditions for all Saudi citizens. For example, the capital for the Real Estate Development Fund was increased to SR40bn and the limit of the loans provided has risen from $80,000-$133,000 (SR300,000-500,000).
Under the supervision of the General Commission for Housing, a project totaling $67 billion (SR250bn) was announced to build 500,000 residential units throughout the Kingdom. These initiatives will stimulate construction activity and increase supply. While there may be short term inflationary pressures, in the long term these investments will create jobs, increase the standard of living and can improve the social fabric through community building.