The housing shortage in Saudi Arabia compounded by very steep real estate prices, among others, gave rise to creation of funds aimed at tackling the ticklish issue.
Industry practitioners came up with innovative solutions to ease the dilemma of buying and owning a house.
Many take the initiative to provide insight, analysis and answers to the housing problem in the Kingdom – comparing the number of solutions proposed by the government by ways of laws, regulations and the projects offered by the Ministry of Housing. Despite these, the problem remains – leaving room for more opinions and analysis.
Divergent reactions ensued ranging from optimistic statements as "real estate gets sick but don't die" to pessimist slur that the real estate market woe is at the "snowball" threshold and may be difficult to stop, while others believe that "the real estate bubble" has begun to take shape just like the one that hit the neighboring countries.
Against this backdrop, one of the industry luminaries launched "Residential communities" – a creative ad innovative solution tailored to address the housing difficulty.
"Residential communities" is one of the innovative solutions that offer clients and investors the real opportunity for living and investing in an outstanding manner. It also combines the privacy, sophistication and luxury favored by house seekers in major cities. Burj Rafal community, for one, is considered a unique model – merging majesty, luxury and integration of services with a variety of spaces that meet the needs of its inhabitants.
Majed Al Hogail, Managing Director, Rafal Real Estate Development Co., said "the activity led by real estate development companies in the market is a positive phenomenon through the creation of products and living style available for numerous categories in the society searching for excellence. The mortgage programs that will handle part of that problem will be a positive factor, he added, but it is not the only solution.
Al Hogail further said "positive synergy must be reached between the private sector, real estate development companies and institutions and the programs suggested by the governmental sector to provide effective and short- and long-term housing solutions."
Moreover, Al Hogail forecast that "during the next five years the real estate market in the Kingdom will witness an increase in activity," saying that "the 8th Development Plan indicates a growth in the real estate activity of an annual average rate of 5.8 percent, and an increase in GDP contribution."
A report issued by the Capital Market Authority for the second half of 2013 showed that there are 85 real estate funds (both public and private) operating in the Kingdom, with total assets valued at SR25.5 billion by the end of 2013, and with 6,582 subscribers."
All public real estate funds achieved a positive performance during the year, with an average performance of 13.6 percent, the CMA report said, noting that Riyadh Bank Real Estate Fund – Burj Rafal Tower was one of the top performers in 2013 valued at 47 percent.
The Saudi Gazette