The Kingdom of Saudi Arabia has announced at last Saudi Vision 2030, its strategic comprehensive vision for the economic and social life in the kingdom by the year 2030. The Crown Prince Muhammed bin Salman was interviewed by the press to explain the vision in a more simplified manner for the Saudi citizens.
Many media channels quoted the crown prince while talking about the vision and many economic experts commented on his proposals. The real estate sector will get a considerable share of focus of the Saudi Vision 2030 according to our reading of the ideas and theses incorporated in it.
The strategy stands on achieving a number of principal economic goals, on top of these goals is reducing the economic reliance on oil revenues. It aims also at opening new economic scopes for sake of diversifying the national income.
The vision didn’t condone also the social aspects that concern Saudi residents and expats. It included applying a new residency system similar to the ‘Green Card’ framework in USA and raising the involvement of women in the Saudi labor market from 22% to 30%.
Real estate sector is both a mean and a target. It’s one of the targets that the vision looks forward to develop, and also an essential mean for realizing other strategic economic goals.
Achieving the ambitious economic goals proposed by the Crown Prince in his interview with the press such as increasing non-oil exports, achieving the first place regionally and 25th internationally in logistic support, and raising foreign investment to 5.7% won’t happen in reality unless there is a true development of Saudi infrastructure.
A real development in Saudi infrastructure will take place by launching new real estate projects of all kinds either residential, commercial, or entertainment besides improving the quality of services offered including electricity, water, sewage, and roads.
The Crown Prince said during his statement that the goals of Saudi Vision 2030 will be realized by the cooperation of private and public sectors. Achieving a vital partnership between both sectors needs creating a positive atmosphere for investment by improving infrastructure.
The Kingdom targets increasing its accommodation capacity for Muslim pilgrims in the holy areas from 8 million to 30 million visitors by 2030. The Kingdom will focus also on vitalizing tourism sector starting with establishing the world’s biggest Islamic museum in Riyadh. The museum will be built in accordance to the highest international standards to offer its visitors an exceptional visit in Islam’s heritage.
All these goals need also raising the efficiency of the Kingdom’s infrastructural basis in addition to building new hotels and residential complexes to accommodate tourists.
A pivotal part of Saudi Vision 2030 is raising Saudi citizens’ house ownership percentage from 47% to 52%.. Work has already been going on for achieving this goal through two main paths. The first path is increasing house apply, and the second one is raising houses availability for citizens.
The economic leadership is taking both paths in parallel as the Housing Ministry signed a number of construction deals with private companies to establish new residential communities in many areas around the Kingdom.
Meanwhile, the government issued a number of laws and decrees to facilitate house ownership for ordinary citizens such as the empty land tax which would decrease properties prices in KSA, in addition to SAMA decision of raising mortgages loan-to-value ratio from 70% to 85%.
Launching the off-plan sales program (also known as Wafi) will also contribute in realizing the goal as there is a huge land stock in Saudi Arabia owned by a few number of owners who don’t have the financial capabilities of investing or converting these lands to true real estate developments.
One of the major components of Saudi Vision 2030 which will help integrate all the vision’s goals together is Neom City. The first transnational city in the Middle East region, Neom City will extend across the borders of the Kingdom of Saudi Arabia, Jordan, and Egypt. The project aims at being a futuristic hub of technology, trade, and entertainment.
For more on this, read our article in the following link about Neom City project.
The Nitaqat Scheme:
The Nitaqat scheme, more commonly known as the Saudization movement, is a long-term strategy; it aims at reducing the unemployment rate of the Saudi citizens through nationalizing the Kingdom’s jobs as they have been occupied mainly by the expats for a long time. Nitaqat plays a major role in achieving the goals of Saudi Vision 2030. Through this, the Saudi Arabian kingdom aims to create a more capable high-caliber workforce of its younger citizens.
For more on the effect of this on the Saudi Arabian real estate market, read our article on the Nitaqat Scheme.
The launch of Saudi Vision 2030 has spurred more hope in Saudis. This seemed so clear from the social media and twitter users’ feedback on the vision launch. A hashtag named ‘National Transformation’ topped the world’s rank for two days as it teemed with Saudis’ comments and opinions regarding the strategy.