Mazaya Monthly Real Estate Report -
December
2014
Al-Mazaya Report re-assures the stressing
demand in the Saudi market to set up more
projects to meet the needs of middle and
low income segments without undermining
the Government efforts of constructing
more housing projects. The Saudi Ministry
of Housing is currently setting up multi-
stairs complexes and villas in partnership
with the private sector as an option to
accommodate the increasing number
of newly established youth families and
overcome the land price challenges.
4
These projects are offered to beneficiaries
in reasonable prices along with
credit facilities offered by the Real-
Estate Development Fund and the
Housing Support Program. Real-estate
development companies in Saudi
Arabia compete amongst themselves to
execute the Ministry projects; in northern
Riyadh for example, five real-estate
development companies won the bids to
construct a one-thousand flats housing
project. Availing the relevant legislative
infrastructure and Mortgage Regulations
will further revitalize the market making
middle-class accommodations more
attractive
and
driving
real-estate
development companies to expand their
options to be soon offered in this domain.
Al-MazayaReportcallsuponmakingmiddle-
class accommodation the wider ground for
investors and individuals to choose from,
while limiting high-class accommodation
to small categories when making
investment decisions, simultaneously
keeping the Government role in this
domain within the same momentum.
Looking at the Emirati market, housing
projects are booming therein following
improvements in real-estate returns
driving investors to launch more housing
and hospitality projects increasing
the demand in the real-estate and
construction sectors by more than 20%
within the first mid-term; availing projects
of above ten billion worth. The more
than 10% increase in profit margins on
construction contracts stimulated real-
estate companies to continuously engage
themselves in housing projects, which are
specially booming in Dubai and received
USD 4.8 billion worth of huge project bids,
thus acquiring more than 75% of total
project bids to be allocated for housing.
Abu Dhabi similarly won a USD 500 million
overall value of housing project bids, not
to mention the on-going Government
initiatives equally touching citizen housing
projects. The gross value of complex
projects which again recovered in first
mid-term is around USD 15 million; 80% of
which are multi-purpose housing projects.
Al-Mazaya Report stressed the significant
role of the middle-class plans when
integrated with long-term national strategies
and investment decisions initiated by both
public and private sectors being the pillar of
the real-estate sector, adding to the market
stability and demand-supply balance. When
comparing middle-class residence projects
to other projects, Al-Mazaya Report says
the last project's return will never decline
to less than 10% annually in any way. This
multiplies when adding social returns and
market shares to the equation as housing
projects account to more than 50% of the
overall local demand. As such, real-estate
companies here encounter a rewarding and
endless demand of investment opportunities.
Al-Mazaya Holdings leads the way in this
domain offering an attractive profile of middle-
class accommodation projects forwarding
"Q Point" project ideally located in Dubai
Land to the front. The project is designed to
meet middle-class residence requirements
of the overall region offered in competitive
prices tailored to targeted social segments.
