Saudi Arabia Housing Sector Outlook

Saudi Arabia has emerged as one of the favored destinations for real estate developers to tap unexplored opportunities in housing construction sector. At present the kingdom is facing massive shortage of housing units because of huge demand-supply gap. Rising population coupled with declining household size has been fuelling the demand of housing units in the country.

Saudi housing construction industry is poised for tremendous growth ahead in the backdrop of several factors that have been discussed in the report in detail. As per data from the Ministry of Economy and Planning’s 8th Development Plan (2005-2009), there is shortage of nearly 0.73 Million housing units in the kingdom besides the unmet housing demand of 0.27 Million housing units by the end of 7th Development Plan. We expect this demand to double by 2015, driven by changing industry landscape and favorable policy framework.

We don’t foresee any impact of global financial crisis on Saudi housing industry in near future. The demand levels within the industry will remain intact due to massive shortage in affordable housing segment. In fact we have found that housing construction industry is expected to overtake other sectors in terms of contribution to GDP growth in the coming few years.

The forecast given in this report is not based on a complex economic model, but is intended as a rough guide to the direction in which the market is likely to move. The forecast is based on the correlation between past market growth and growth in base drivers, such as household size, disposable personal income, GDP growth and long-term interest rates, competitive structure, government support, contribution by housing financing industries and growing industrialization.

“Saudi Arabia Housing Sector Outlook” provides extensive research and objective analysis on the growing housing industry of Saudi Arabia, its components and supporting financing structure. This report helps clients to analyze the factors critical to the success of housing industry in Saudi Arabia. Detailed data and analysis help investors, financial service providers and global real estate players navigate through the latest trends in the Saudi Arabia housing industry.

1. Analyst View

2. Industry Snapshot

3. Demand Drivers

3.1 Economic Growth

3.2 Petro Dollar

3.3 Booming Population

3.4 Decreasing Household Size

3.5 Credit Availability

4. Housing Market Overview

5. Saudi Arabia Housing Market Outlook - 2012

5.1 By Ownership

5.2 By Type

5.3 By Construction Material

5.4 Investments

6. Housing Demand Analysis

7. Mortgage Law and its Implications

8. Future Residential Projects

9. Key Players

9.1 Makkah Construction and Development Company

9.2 Red Sea Housing Services

9.3 Arriyadh Development Co.

9.4 Dar Al Arkan Real Estate Development Co.

9.5 Saudi Real Estate Company

List of Figures:

Figure 3-1: Nominal GDP (Billion SR) and Real GDP Growth (%), 2003-2008

Figure 3-2: Earning from Crude and Refined Products (Billion SR), 2003-2008

Figure 3-3: Saudi and Non-Saudi Population (Million), 2003-2008

Figure 3-4: Average Saudi and Non-Saudi Household Size (2004 & 2015)

Figure 3-5: Consumer Loans for Real Estate Finance (Billion SR), 2004-2008

Figure 4-1: Distribution of Housing Stock in Major Cities (‘000), 2000, 2004 & 2007

Figure 5-1: Share of Housing Units by Tenure (2007)

Figure 5-2: Share of Housing Units by Construction Material

Figure 6-1: Forecast for Housing Units Demand (Million), 2009-2015

Figure 7-1: Mortgage Law and Trend Shift in Demand

Figure 7-2: Forecast for Housing Finance Demand (Billion US$), 2009-2012

List of Tables:

Table 4-1: Residential Real Estate Market Outlook

Table 5-1: Status of Housing Industry under Various Developments Plans

Table 5-2: Number of Housing Units by Type

Table 5-3: Number of Housing Units by Administrative Area and Construction Material (2007)

Table 6-1: Housing Units Demand Under 8th Development Plan (‘000), 2005 to2009

Table 8-1: Major Developments Scheduled for Completion in Residential Segment