Saudi Arabian housing sector suffering shortfall

Saudi Arabia needs to invest more than SAR 680 billion (US$ 181.3 billion in its real estate sector to meet expected demand for housing by 2015, according to a report, by local investment bank NCB Capital.

The report, Saudi Arabian Real Estate: Kingdom under construction, said Saudi Arabia's booming population was creating an "acute" housing problem for the kingdom.

The report forecast incremental residential demand of more than 1.3 million units over the next seven years, with an investment of SAR 680 billion ($181.3 billion) needed to meet that demand.

The four largest provinces of Makkah, Riyadh, Madinah and the Eastern Province would require a housing investment of over SAR 600 billion (US$ 160 billion) over the period, said the report.

However, the shortfall should prove an opportunity for companies in the real estate and allied sectors, it added. The report predicted residential and commercial real estate sales would grow, while the expected introduction of a mortgage law and government investment in economic and industrial zones would also prove positive.