Housing boom ‘unaffected’ by oil price plunge

Falling oil prices would not affect ongoing housing projects in the Kingdom or the loans for citizens provided by the Real Estate Development Fund (REDF) because allocations have already been budgeted for this spending, said Housing Minister Shuwaish Al-Dhuwaihi on Tuesday.
“We are not facing any finance problem in the short run,” the minister told the 150-member Shoura Council. He said the ministry would press for fees on vacant land as part of efforts to bring down real estate prices. “We have already presented a detailed study on the issue,” he said.
Shoura President Abdullah Al-Asheikh, who presided over the special session, said the government has given top priority to housing because it is one of the major problems facing citizens. The government has allocated SR250 billion from budget surpluses over the years to construct 500,000 low-cost homes.
Al-Dhuwaihi impressed the Shoura members with his ministry’s plans to resolve the housing problem. “We have completed construction of 13,000 housing units while 12 projects are under construction to supply 44,000 units. We are also preparing designs for 80 projects with 100,000 units in addition to nine projects with 4,700 units.”
The ministry has received 261 plots with a total area of 345 million square meters to implement new housing projects, he said, while stressing the need to obtain more plots in major cities such as Riyadh that require more housing units.
“The ministry wants to strengthen its partnership with the private sector, launch an Ejar (rental) service network to organize the market, study alternatives for home finance and diversify housing products,” he said, adding that the ministry has identified 750,000 beneficiaries for housing loans from nearly 1 million applicants.
Elaborating on the issue of developing alternative housing finance sources, he said: “We have held a workshop with representatives of banks and the Saudi Arabian Monetary Agency to promote long-term finance, and reduce risk factors.”
The REDF has granted 750,000 loans over the past 41 years including 195,000 during the past four years, the minister said. “We are now in the process of providing land, housing units and loans to 306,000 applicants.”
He said the REDF has reduced the waiting period for loans from 16 to 10 years and efforts are underway to cut it further to five years. The Shoura president presented the minister with 500 questions he received from citizens. Al-Dhuwaihi promised to answer all of them.