Demand for Jeddah’s real estate market is forecast to rise on the back of the kingdom’s plans to increase home ownership among local residents, JLL said in a report.
As part of Saudi Vision 2030, the government seeks to slash the average waiting period for local residents to obtain housing financing to 5 years from 15 years, along with rising household ownership ratio to 70% by 2030 from the current 47%, the commercial property services provider added.
Dana Salbak, associate, JLL MENA, said that there is an indication that Jeddah’s real estate market may be headed towards the bottom of its cycle due to the slowdown in the rate of decline in sales and rental prices on a quarterly basis.
In the same vein, Saudi Arabia plans to boost the real estate sector’s contribution to the gross domestic product (GDP) to 10%, from 5% by 2020, the According to Q1 Jeddah’s Real Estate Market Overview report.
Dana Salbak added that to stimulate demand in the residential market the Kingdom is making rapid progress by introducing various residential schemes to increase local investors. The government has launched large-scale and world-class projects, implementing urban development and regeneration schemes.
The Saudi Arabian government is also at pains to raise the private sector’s role in developing cities by spurring private and public partnerships (PPPs).
While the PPP model is already in practice as the government announced new housing schemes consisting of 48 projects last year, we expect to see the announcement of further PPP agreements over the coming years particularly in the housing, healthcare and education sectors of the real estate market.