Saudi Arabia’s Housing Ministry is planning to spend up to SR59.2bn ($15.8bn) on housing over the next five years to ease the shortage of affordable homes.

The target was revealed on 6 June as more details from the National Transformation Plan (NTP) were made public.

Following the news local developer Dar al-Arkan announced it is in talks with the government to develop housing units under the economic reform plan.

In a statement on the Saudi Stock Exchange (Tadawul), the company said it is currently negotiating terms with the Housing Ministry.

Earlier this year, the ministry said there are more than 166,000 housing units due to come onto the market, comprising 66,000 that are under construction and 120,000 new projects in the design phase. It said it hoped to provide a large number of units at “reasonable” prices by developing and delivering 100,000 units this year, in addition to providing 300,000 over the next few years.

In April, an agreement was signed with a consortium of South Korean contractors Hanwha Engineering & Construction (E&C) and Daewoo E&C, and the local Saudi Pan Kingdom for Trading, Industry & Contracting (Sapac) to develop 100,000 homes 35 kilometres north of Riyadh. The new town will be called Dahiyat al-Fursan.

The agreement came the same week in which Dubai developer Nakheel signed a deal to develop thousands of houses north of Riyadh. The agreement, signed with Saudi Real Estate Company (Al-Akaria), will see the developer provide services including masterplanning, design, construction management, and mall design and management.

According to regional projects tracker MEED Projects, there are about $18bn-worth of housing units under construction in the kingdom (excluding military, labour, student accomodation and the South Korean deal above), with $7.4bn-worth at the planning stage.