Saudi Arabia’s off-plan market is a driving force fueling a vibrant and sustainable society and its sales models can increase the effectiveness and affordability of the kingdom’s real estate market, directly contributing to goals set out within Saudi Vision 2030, according to top professional services company PwC.
In its Middle East’s latest report, PwC said off-plan residential offerings can help bridge the gap of 1.5 million housing units in Saudi Arabia, directly contributing to goals set out in Vision 2030.
As part of its National Housing Programme, Saudi Arabia has set out a target of increasing home ownership to 70%, up from 47% in 2016.
Achieving this goal requires a significant leap in residential real estate supply by approximately 1.5 million housing units or 115,000 units annually.
The Kingdom’s National Transformation Programme as well as the Ministry of Municipal and Rural Affairs and Housing (MoMRAH) have introduced several innovative products and initiatives to support this objective, such as market-ready units provided by real estate developers or individual owners, access to financial institutions for housing support, and setting up a legal framework for housing programmes, said the report.
In a historically ready-property market, off-plan properties provide an opportunity for both local and foreign investors to create more affordable housing options, thereby boosting the GDP of the kingdom.
Off-plan sales can also stimulate and grow the banking sector to create financial solutions that could cater to different beneficiary segments, grow the real estate brokerage market, and stimulate multiple purchases from investors.
Highlighting the findings, Imad Shahrouri, Housing and Real Estate Cluster Leader, PwC Middle East, said: "Since its launch in 2016, the off-plan sales approach has become a key product to achieve the objectives set out in the National Housing Programme. It has been a key factor in accelerating the process of home ownership, increasing capabilities of real estate developers to undertake large and integrated projects and stimulating supply."
"Off-plan sales have paved the way for evolutionary change within the local real estate market, creating a collaborative ecosystem for business consultants, construction contractors, private developers and financiers, as well as marketing agencies and sales brokers," he noted.
Recent years have seen a surge in off-plan property sales in the Kingdom, recording 52% growth in the first half of 2023, compared to the same period in 2022.
The kingdom’s real estate market has now made it a feasible possibility for a new generation of Saudi to own their own property.
In tandem with considerable changes made to the local real estate market, including the development of comprehensive and clear regulations, cultivating stronger partnerships between public and private sector players and empowering developers, the kingdom can bridge the gap between supply and demand for residential housing, he added.-TradeArabia News Service