RESIDENTIAL
RESIDENTIAL PLANS IN THE PIPELINE
Known as the ‘Gateway City’ due to its proximity to the Holy cities of Mecca and Medina, Jeddah is undergoing rapid growth and under pressure to deliver affordable housing to meet the demands of its burgeoning youth population. Cityscape magazine reveals more
Jeddah is on. Te real estate industry recently received a welcome boost after the Saudi Government unveiled a stimulus package worth SR1 trillion. Tis is expected to provide significant support to the real estate sector. A number of measures were revealed which included a Royal Decree aimed at improving living conditions for all Saudi citizens. Te capital for the Real Estate Development Fund was also increased to SR40bn and the limit of the loans provided increased from SR300,000 to 500,000. Another major announcement made was under the supervision of the General Commission for Housing, a project totaling SR250bn was unveiled to build 500,000 residential units in all regions of the Kingdom. Jones Lang LaSalle said these initiatives will ‘stimulate construction activity and increase supply.’ And while there may be short term inflationary pressures, in the long term these investments will create jobs, increase the standard of living and can improve the social fabric through community building. According to the Oxford Business Group’s report on Saudi Arabia, Jeddah’s population has ballooned from 1.4m in 1987 to 3.6m today however, the city’s infrastructure hasn’t quite matched the pace. While there are a number of master developments in progress, Saudi Arabia as a whole has a huge challenge ahead. During 2012, construction projects are expected to be worth around SR237.4 billion ($63.2 billion) as the Saudi Government proceeds with its ninth Five-Year Development Plan. A large proportion of funding has been assigned to infrastructure and construction within the healthcare sector, in anticipation of the future healthcare requirements. Te Saudi Ministry of Health has allocated more than $18 billion for healthcare services and social development, including the construction and equipping of primary healthcare centres, the building of 120 new hospitals and the upgrade of four existing hospitals which will be vital to care for the for the 60% of citizens (17.6 million) aged between 15 and 64. According to Deutsche Bank AG (DB) research, the country as a whole needs 1.2 million new homes by 2015. JLLS says the market will require approximately 900 new homes delivered each day over the next five years and whereas the residential sector was traditionally dominated by micro- developments (less than 5 units), the market will move more to mid-scale
W
ith 80% of the country’s population under the age of 39 and a high proportion of married couples looking for affordable entry-level housing, the race to provide sufficient housing in
planned communities built by professional developers. In JLLS’s Top Trends for Saudi Arabian Real Estate 2011, experts said: “While the residential market is supported through the stimulus package and infrastructure investment, delivering homes to citizens and achieving social objectives will require innovative acquisition structures. Although off-plan sales have started, the mortgage law remains a critical factor in expanding homeownership among citizens.”
Positive steps Te Jeddah Development and Urban Regeneration Co (JDURC) is giving high priority to addressing the city’s severe shortage of housing for low and middle-income residents and has planned extensive development to meet the city’s rising demand for accommodation and prevent further unplanned settlements. Te objectives are to provide good quality and economical housing to meet rising demand, to cater to the housing needs of people displaced from redeveloped unplanned settlements. Te Oxford Business Group says ‘concrete steps’ are already being taken
to address the shortage of homes in Jeddah. “JDURC’s 20-year plan for the city includes some 283,000 new housing units. Of these, 80,000 are to be set aside for low-income residents and 150,000 will house people displaced by initiatives to clear unplanned areas. Two such areas are the Khozama and Ruwais neighbourhood, where many poorer residents reside. JDURC is clearing these areas by sending residents to affordable housing units east of Jeddah, while partnering with private developers to rebuild the neighbourhood’s roads, public services and infrastructure.” Te Oxford Business Group report also states Wadi Al Asla is one of
JDURC’s largest and most promising projects. “With housing for 83,000 residents, a university, and technology park, golf course, motor sports track and safari park. Catering for the higher end of the market will be the Jeddah Gate project. Billed as a modern, mixed-use residential complex being developed by Emaar Middle East. Te $1.6bn project won the “best residential project (future)” and “best urban design and master planning” at Cityscape Jeddah last year. It’s set to include 6,000 residential units, 75,000 sq metres retail space and Abraj Al Hilal, three high-rise residential buildings.” Between 2015 -2018, three more residential projects will be completed – Kepple Land, Ewaan and Jeddah Land projects will provide an additional
6 I CITYSCAPE I JUNE 2011
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