Saudi Arabia’s Housing Minister Shuwaish bin Said al-Dhuwaihi, has signed eight new contracts worth SR4bn ($1.06bn) to build 40,000 homes across the kingdom.

Al-Dhuwaihi said 26 million square metres of plots would be developed in Jeddah, Medina, Dammam, Al-Ahsa, Qatif, Tabuk and Al-Kharj as part of an initiative by King Abdullah to provide more land and housing loans to citizens in the country.

The projects are part of the government’s plans to build 500,000 new homes for Saudi nationals in the coming years to cope with increasing demand. It is estimated the kingdom needs to build 1.65 million new homes by 2015 to meet the housing requirements of its rapidly expanding population, which is currently growing by more than 2 per cent a year.

In late 2011, the ministry appointed US-based Parsons International to manage the first phase of the programme, which accounts for about 135,000 houses.

In February, the ministry received bids from contractors for a scheme to build 2,000 residential units for the Prince Fawad housing development in Jeddah.

In April, the local Abdullah AM Khodari Sons signed an estimated $207.8m contract with Saudi Arabia’s Housing Ministry for infrastructure works for housing developments in several locations around the kingdom.