Database to speed up real estate funding

Establishing an organizational framework to develop ideal cities in Saudi Arabia is what the Saudi ministers called for during the first day of the Jeddah Economic Forum (JEF).
Showisha Al-Duwaihi, minister of housing, confirmed that plans are under way to launch a new system to organize ownership and housing rents.
“We are looking to increase the efficiency and sustainability of the housing system in the Kingdom through developing a program called “Ijar,” which will set the prices as well as monitor and study the market. The project will be ready by the end of the year,” he said.
Al-Duwaihi added: “We have increased the rate of loans as an initial step to try and resolve the housing crisis, thereby enabling lenders to receive grants within eight months of applying.”
He also said the Housing Ministry has developed a project, which involves data gathering, strategy devising and providing electronic solutions.
“We are cooperating with different government bodies to establish a database that will enable us to accelerate the funding process. For example, we are cooperating with the ministries of Interior, Justice and Social Affairs as well as the Electricity Company,” he said.
He also said that “divorced women, widows, the disabled and elderly people, in addition to underprivileged citizens will be put in a special category enabling them to receive funds efficiently.”
According to Al-Duwaihi, demographics have changed, which is why the ministry is looking to change its policy in terms of land management, issuing license and specialized courts.
“We are launching a new network called 'rent network' to develop the rent law, ensure the rights of contractors and electronic documentation. We also launched the program, “Muyaser,” to facilitate buying economic houses,” he said.
The government’s role in 2020 will be reduced whereas the private sector role will increase. “The government role will be limited to organizing, while the private sector will work more effectively,” said Al-Duwaihi.
Muhammed Al-Jasser, minister of economy and planning, said: “The recent budget specified for providing houses with the best services, and this should be our main goal rather than only providing houses.
“In the Eighth and Ninth plans, the budget specified for housing was SR 275 billion, whereas SR 324 billion was specified for communication and transportation and SR 250 billion for water and sewer system.”
The Kingdom began the real estate development fund where it presented 841,000 residential units so far, said Al-Jasser.
“During the past seven years real estate development fund has issued 175,000 debts, and contributed to speeding up the loans process, building houses,” Al-Jasser said. “Saudis' movement from small villages to big cities led to an increase in the organized societies from 46 percent to 83 percent between 1974 to 2010.
“The change in the demographic map requires us to have new update database to support the housing plans,” he said.
Tawfik Al-Rabiah, minister of commerce and industry, said that during the previous three years the private sector did a great job in terms of developing housing projects. “In addition to private sector contribution, the government also came up with important projects that defined the future of housing in the Kingdom,” Al-Rabiah said. “One of the important projects is the building of 500,000 residential units.
Fahad Al-Mubarak, governor of Saudi Arabian Monetary Agency, spoke of the importance of mortgage. “Introducing the mortgage law will organize the fund market,” he said. “There are currently six funding companies with a capital of SR 600 million. The amount of fund in 2012 was estimated at SR 50 million.”
According to Al-Mubarak, the sector grew 25 percent in the previous five years.
“We studied the successful experience of other countries in terms of mortgage, and then we put the five regulations of the law. We are now establishing a funding company with a capital of SR 5 billion to develop the mortgage and finance lease system” he said.