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says JLL MENA in its latest MENA House View
Future demand for affordable housing in Saudi Arabia will provide significant opportunities for both developers and investors over the next few years, according to the latest MENA (Middle East North Africa) House View report published by JLL MENA, the world’s leading real estate investment and advisory firm.
Saudi Arabia faces a potential shortfall of up to one million housing units in the Kingdom over the next three years, driven by demand from the kingdom’s young, fast growing and rapidly urbanising population. This demand for new space is not currently being matched by the supply of quality residential accommodation at affordable prices.
“Saudi Arabia is a market with huge potential but affordability remains the main challenge that needs to be overcome,” said John Harris, Head of KSA operations for JLL MENA.
“There is currently a pricing mismatch between what the market is delivering and what most potential purchasers can afford to pay for their housing. Affordability will unlock the undoubted latent demand for additional housing, converting this into actual demand and increased sales activity.”
To meet the affordable housing challenge, JLL MENA has identified four sets of criteria that need to be addressed to provide sufficient affordable housing in the Kingdom:
The report goes on to state that compared to other major real estate markets around the world Saudi Arabia continues to offer an attractive long term opportunity, with investors expecting to be the first market in MENA to recover from the current downturn. JLL MENA also expects the Kingdom to be one of the strongest performing real estate markets in the region over the next 12 to 24 months, being the only market where investors expect prices to increase rather than decrease during the same period.
Commenting on the Saudi market generally, Abdollah Faadhel, Business Development Director for JLL MENA states:
“These observations are based on our local and regional knowledge balanced with global best practice. Saudi Arabia’s real estate market offers investors and developers significant opportunities. Given the generally worsening investment climate in the region, the focus is firmly shifting to the Kingdom where stronger fundamentals and sentiment offer more secure prospects in the medium term.”
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