Saudi housing sector in transitional phase

JEDDAH: Saudi Arabia’s housing sector is currently in a transitional phase due to changes in the mortgage law and taxes, industry experts said at Jeddah Economic Forum (JEF) 2016 on Thursday.
Speakers at a panel discussion on housing at the forum said they are anticipating the market dynamics “to conclude shifting and become more clear during the first week of Ramadan, once the white land tax has been implemented”.
Basil Al-Ghalayini, chairman and CEO of BMG Financial Group, moderated the discussion, which featured Nidal Jamjoom, CEO of Kinan; Zuhair Hamzah, CEO of SEDCO Development; Alper Apaydin, senior adviser to AkarOne; and Ayman Mansi, director of Residential Development, King Abdullah Economic City.
The experts discussed and agreed that the primary goal of public-private partnership (PPP) in the housing sector is aimed at solving the supply shortage.
The developers noted that while they have substantial volumes of ongoing projects, the market includes several other private developers which impact the market dynamics as well.
Best practices from Turkey were discussed, with a case study on Emlak Konut, a real estate developer belonging to the Housing Development Administration of Turkey.
While the entity is state owned, it is a model example of PPP as it functions with minimal government influence.
The session also addressed that the primary challenge to PPP in housing is the fact that this direction is very new for the sector, with little precedent to follow.
On the second and final day of the forum, keynote speakers and participants in several discussion panels focused on the steps needed to implement PPP with foundational industries in Saudi Arabia.
Saudi Arabia needs to ensure that its youth are educated to global standards and employed in vital industries.
Arvind Mahajan, head of infrastructure, government and health care services at KPMG India, set the tone for the day.
He said technology has an impact on how we design infrastructure. This creates a real opportunity for countries like the Kingdom of Saudi Arabia to ‘leapfrog’ ahead of nations with older infrastructure, avoiding the legacy issues which hold many nations back. he said.