Private developers want Saudi Arabia to establish a bank dedicated to funding new projects that would
help address the country’s housing shortage.

They are also calling for the government to subsidise land and streamline development approval processes,
banks to be more lenient in lending to developers and investors, and residents to lower their expectations of living in a grand house.

Housing affordability has become a major concern in the Gulf nation, despite the government announcing
multiple projects to build up to 500,000 new homes within a few years.

“The main issues facing the need for affordable housing in Saudi Arabia are population growth and income
levels, but we also have internal issues such as escalating land prices, the preference of Saudis for large, expensive houses and the unwillingness of banks to offer project financing,” Ewaan Global Residential Company CEO Riyadh Al-Thuqafi told a conference in Saudi Arabia, according to the Saudi Gazette.

“In order to solve these issues, the government sector must work with private sector developers,”
he said.

Al-Thaqafi said urbanisation would see the population of large cities such as Jeddah, Riyadh and Dammam grow by between 52 and 58 percent by 2025, causing even more demand for housing. He called on the government to appoint an agency to regulate land prices and stop price escalation and manipulation.

A governmental body backed by the Capital Market Authority also should be established to finance real estate projects in place of banks, which were reluctant to support many of the country’s development plans, Al-Thaqafi said.

Residents also needed to lower their expectation of living in a 200 sqm-plus home.

Source:  http://www.arabianbusiness.com/saudi-housing-shortage-requires-dedicated-bank-developers-491701.html