The news that Saudi Arabia Mining Company (Maaden) and the investment arm of the state-owned Public Pension Agency, Al-Rayadah Investment Company, are moving ahead with large housing schemes is encouraging news for the citizens of Saudi Arabia. But although the new housing projects are welcomed, Riyadh needs to do a lot more to avert a serious housing shortage.
Saudi Arabia does not have enough homes for its people, and, with the country’s growing population, the shortfall of suitable housing will continue to widen until enough new supply enters the market.
Maaden and Al-Rayadah’s projects follow large tenders from the Interior Ministry and National Guard in the past year for large housing schemes. Progression with these initiatives will be good news for Saudi citizens, but they make up just a small proportion of the new housing projects required over the next decade.
At the heart of King Abdullah’s plans to improve living conditions for Saudi nationals is a Housing Ministry programme that set an initial target of building 500,000 new homes by 2013. The king’s pledge in March last year to spend upwards of $67bn on solving the housing crisis was well received throughout the country, but as yet there has been little progress with the programme.
The Housing Ministry was set up to replace the largely ineffective General Housing Authority, which completed only 600,000 of the 1 million new homes that were targeted in the country’s 2005-09 National Development Plan. With an expected shortfall of 1.65 million homes by 2015, it is important the ministry delivers its housing programme and works alongside private developers to ensure projects are completed on time and the housing gap is reduced as much as possible.
With poor living conditions at the root of the majority of the uprisings across the region in the past 17 months, Riyadh knows it is crucial that it delivers on its pledges.