Saudi Arabia has set itself a target of developing 1 million low-cost homes over the next five years, the kingdom’s housing minister told reporters at a conference in Riyadh on 3 May.

Majed al-Hogail told local reporters that the government is close to finalising a number of agreements with Chinese and South Korean companies.

The ministry previously committed to spending SR59.2bn ($15.8bn) on building 400,000 affordable homes by 2020. It has also said it is studying different types of partnerships with local and international developers to build 1.5 million houses by 2024.

In April last year, Riyadh signed a memorandum of understanding (MoU) 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) for the construction of homes 35 kilometres north of Riyadh. The new town will be called Dahiyat al-Fursan.

There will also be an SR3bn programme under build–operate–transfer (BOT) and PPP systems providing housing to widows and orphans through charities and orphanages in cooperation with the Ministry of Labour and Social Development.

Saudi Arabia is facing a significant challenge to meet the housing demand. More than 65 per cent of its 30 million population under the age of 30, and 750,000 families are eligible for public housing across the kingdom’s urban areas, according to government statistics.