Resident units more affordable thanks to new policies of Saudi Ministry of Housing

Resident units more affordable thanks to new policies of Saudi Ministry of Housing
The number of beneficiary families from subsidized real estate loans options to buy “ready units”; and “under-construction” residences exceeded 49,000 households between the beginning of the year and the end of April, 2021.

"Jadwa": The reforms in housing sectors by the Ministry of Housing's policies make residential units prices more affordable.

A recent report issued by JadwaInvestment said on Monday that the overall inflation rate in Saudi Arabiadeclined by 1.9% in April 2019 compared to April 2018, while the percentageremained the same compared to last March. The report points out that thisdecrease has been influencing the housing, water and electricity sectors sincethe beginning of 2019.

The prices of services and goods inthe housing, water, electricity and gas sectors declined by 8% from thebeginning of 2019 to the end of last April. According to the report, thereasons behind this are the decline in rents of residential units around 9.1%during the same period, and the reforms made by the Ministry of Housing in thereal estate sector that make the price of houses affordable for citizens.

"Jadwa" report refers to "Sakani", the program of Saudi Ministry of Housing that provided about 630 thousand units for citizens since February 2017; the housing units accounted 48% of them. In addition to the announcement of launching 200 thousand housing and funding units during this year, 50 thousand is residential units, 50 thousand residential areas, and 100,000 mortgages. From the beginning of the year until last April, about 55,000 residential options have delivered. There are 145,000 units remain to reach the target of the Ministry for 2019.

"Jadwa" report points outthat the decline in the number of foreigners in the Saudi market by 1.6 millionpeople last two years, led to a decline in the rent prices in SA, despite beinga subset of the real estate sector. The large role of the lower demand forrented housing consequently lowers prices.

According to the report, residential prices fell by an average of 2.1% compared to the high prices in 2018 due to VAT. The report revises Jadwa's expectations of inflation rate this year, as a whole to (-1.7%) compared to last year due to adjusting of energy and electricity prices.

The report also points out that theprices of transportation declined by 0.5% in April 2019 due to the policy of Aramcoin adjusting the domestic price of gasoline compared to international prices.The report predicts a low growth in seven sectors out of 11 including: health,clothing, and entertainment, and an increase in prices of a number of sectorsincluding food and beverage, restaurants, and hotels by the end of 2019.

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