The Saudi real estate market is set to witness a sustained increase in demand and strong growth in line with the expected boom in other key sectors such as retail, manufacturing and construction, thanks to the upturn in the Saudi economy in the first half of 2013, Injaz Development Co. has pointed out in its recent study.
The study indicated that these positive indicators are a result of the major development projects being undertaken in vital sectors in order to keep pace with the growing demand. The Saudi construction and building sector is expected to grow by 7.5 percent during 2013, which in turn will enhance the performance of the real estate sector through the major construction projects being launched.
The real estate sector has been showing strong performance during the past few months, especially in Riyadh and Jeddah, mainly in terms of prices and revenues.
The study showed that this robust performance is driven by various emerging factors, which include growing demand, attractive environment for local and regional investors, implementation of the new mortgage law, support offered by the banking sector and investment companies to the local market, in addition to the Additional Loan Program which has been met with widespread acclaim.
These factors stress the importance of launching and development of land schemes projects to support the sustained growth, especially in the areas witnessing high demand.
Injaz study forecast more promising opportunities in key growth areas in the real estate sector, driven by the local, regional and international investors' expansion plans in the Saudi market to utilize the immense potential at all levels.
The study further noted remarkable growth in different fields within the real estate sector with various prices, especially in Riyadh, in line with the strong performance of the Saudi economy which attained positive growth during 2012, achieving a GDP of SR2.727 trillion.
Injaz revealed that there are important developments taking place in Saudi construction sector, including the real growth of 9.3 percent witnessed in 2012, according to a report by Business Monitor International, which will contribute to boosting investor confidence in the Kingdom, even as the annual growth rate of the construction sector is expected to remain stable at 5.9 percent until 2017.
Omar Al-Kadi, CEO and Managing Director, Injaz Development Co., said: "Building and construction activities will have the largest share of growth over the next three years, in line with the announcement of a series of ambitious spending plans aimed at developing new projects and strengthening infrastructure. Further, the implementation of major projects covering building of schools, primary healthcare centers, hospitals, along with transport and municipal projects such as construction of intersections, tunnels, bridges, roads, gardens, parks and waterfronts across the Kingdom will have a significant positive impact on Saudi Arabia's urban landscape."
"The increasing government spending, along with the issuance of the mortgage law and adoption of ambitious development plans will be the most significant factors that will contribute towards strengthening the reputation of Saudi Arabia, and Riyadh in particular, as a leading investment destination. We are committed to provide the Saudi market with unique and world-class solutions which are specially designed to meet the growing demand for housing, through developing advanced infrastructure projects to serve the local community and support the real estate boom in Saudi Arabia," Al-Kadi noted.
The Saudi Gazette