In the bustling capital city of Riyadh, Saudi Arabia, the dream of owning a home is becoming more and more elusive for the average citizen. The housing minister has acknowledged the escalating property prices that have now become a pressing concern for the government. With real estate prices surging dramatically since the pandemic hit, the cost of owning a house in Riyadh is now nearly 81% higher than it was in 2020. Furthermore, apartment prices have spiked by 56% during the same period.
Efforts to achieve a 70% owner-occupancy goal by 2030, set by Crown Prince Mohammed bin Salman, are being hampered by this surge in prices. While the overall homeownership rate in Saudi Arabia has risen from 47% to 63% since 2016, the figure in Riyadh stands significantly lower at 53.2%. Housing minister Majed al-Hogail stressed the government’s commitment to addressing affordability issues through various initiatives despite the soaring prices in the capital.
- The government is building over 30,000 units in newly developed suburbs with prices starting at SR375,000.
- Citizens can avail state-subsidized bank loans to purchase these homes off-plan.
- Local developers are increasing the supply of housing units to improve affordability.
The wave of young Saudis flocking to Riyadh in pursuit of job opportunities has contributed to the spike in property prices, defying the rising borrowing costs. This influx, coupled with the relaxation of social norms and the boom in new projects, has fueled the demand for housing in Riyadh, making it increasingly unaffordable for many.
An average three-bedroom villa in Riyadh now costs around SR2.28mn, far exceeding the budgets of most Saudi citizens. Mansour, a civil servant, lamented the soaring prices, questioning his ability to afford a home in Riyadh with his current income. The housing market outside Riyadh has remained relatively stable, with prices even falling in cities like Jeddah.
Developers like the PIF-backed Roshn Group are adapting to the shifting demands of the market to cater to younger buyers by creating integrated, walkable communities with shared amenities. However, the mismatch between the housing prices and the budget of many Saudi nationals remains a significant challenge.
As the landscape of housing in Riyadh evolves to meet the demands of a changing society, it is crucial for policymakers and developers to collaborate effectively to make home ownership a reality for the majority of citizens. The journey towards affordable housing for all in Riyadh is a complex one, but with innovative solutions and concerted efforts, the dream of owning a home in the bustling capital can be within reach for more Saudis.
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