PPPs used to tackle housing shortage in Saudi

Economic reforms on the Saudi housing market are being implemented as more public private partnerships (PPPs) are being used to tackle the continued shortage of affordable housing in Riyadh.

According to JLL’s Q1 2017 Riyadh Real Estate Market Overview report, the total stock of residential units in Riyadh stands at around 1.17 million units as of Q1 2017.

With an additional 24,000 units expected to be added by the end of the year, this total is likely to include more affordable projects developed under PPP agreements.

And with more MoUs being signed recently between the Ministry of Housing and the private sector, these agreements, according to the report, are considered “a positive in terms of increasing future supply in line with customer preferences and pricing”.

Jamil Ghaznawi, national director and country head, JLL, KSA, said: "This signing indicates that both the public and the private sector in Riyadh are expected to streamline the development processes of housing schemes and in turn reduce both timeframe and construction costs.

"The launch of East Gate – a large-scale residential project consisting of 7,000 units in Eastern Riyadh marks the first public private partnership (PPP) executed by the Ministry of Housing. With this momentous signing, additional similar partnerships are expected to enter over the course of the next year," he added.

The residential sector in Riyadh has softened over the quarter with apartment sales decreasing by 2% quarter-on-quarter with sale prices of villas falling by 1%.

The report also indicated that the number of transacted villas in Q1 2017 fell by almost 40% compared to the same period last year and a 2% increase relative to last quarter.