As a Saudi homeowner, Sheikh Abdullatif Al Shelash says those desiring to purchase homes in the largest Arab country in the Middle East should consider a mortgage before paying cash.
There’s a significant movement for more Saudis to own homes than ever before. Within the next seven years, the Kingdom is betting on some innovative projects to bolster tourism and boost its economy to unprecedented levels.
Housing prices in Saudi Arabia are experiencing an uptick due to inflation, which was 2.9% in November. A month later, it hit 3.3%, according to Saudi Arabia’s General Authority for Statistics. Despite this, homeownership in the Kingdom has increased from 47% to 60% over the past few years.
Saudi Arabia is progressing at its most accelerated pace in 10 years. Sheikh Abdullatif Al Shelash says Saudi Arabia is not only thriving, but its economy is on the rise.
“[The] population [is] growing. Middle incomes [are] growing,” Al Shelash says. “Certain changes in the last three years have almost doubled household income.”
All of those changes, combined with more women entering the Saudi workforce, are altering the landscape of Saudi Arabia’s demographics. A mere seven years ago, women comprised 17.7% of Saudi’s workforce. Ahmed Al Rajhi of the Ministry of Human Resources and Social Development reports that the number has swelled to 37%.
Abdullatif Al Shelash adds that what continues to make Saudi Arabia stand out in the global market is how its real estate sector, alongside the mortgage industry, still has a long way to grow.
“There’s going to be a standardization of the houses,” Al Shelash explains.
He says that will lead to a higher-quality product. Saudi Arabia is ready to implement changes to its construction standards and invest more in its housing sector.
The Saudi housing category transformation is an essential mission of the Kingdom of Saudi Arabia, according to Imad Shahrouri, housing and real estate cluster leader — consulting for business advisory service PwC Middle East., housing and real estate cluster leader — consulting, for business advisory service PwC Middle East.
Saudi Arabia is adding 1.2 million new homes, and over the next eight years, PwC Middle East says the demand for residences is slated to soar by more than 50%.
“The comprehensive strategy deployed throughout the years has driven a massive positive change for Saudi families, developers, builders, capital providers, housing finance agencies, and other stakeholders,” Shahrouri says in a video on pwc.com. “This housing transformation is rapidly increasing homeownership percentage rates.”
They are increasing mortgage maturity lengths from 25 to 30 years, fueling expanded options for Saudis. A new bylaw that has made it legal for citizens to rent their abodes to travelers is also changing the Saudi real estate market. Saudi homeowners can now apply for permits to rent their homes for vacation rentals. It’s another bold move the Kingdom is making to improve finances for homeowners and create more immersive, authentic experiences for tourists.
While Saudi Arabia is already a big draw for religious visitors making pilgrimages to Mecca and Medina, it’s quickly becoming an international tourist phenomenon, thanks to its blend of ancient historical culture and modern architectural works of art. Last year, 67 million people flocked to Saudi Arabia, and that number is expected to escalate. to Mecca and Medina, it’s quickly becoming an international tourist phenomenon, thanks to its blend of ancient historical culture and modern architectural works of art. Last year, 67 million people flocked to Saudi Arabia, and that number is expected to escalate.
The Next Phase of Saudi Housing Will Be Ahead of Its Time
Futuristic city Neom recently released footage of the high-end Red Sea island destination, Sindalah, which is scheduled to open in 2024. It’s billed as “a place where enhanced nature meets responsible design, advanced technology, and inspirational architecture.”
Sheikh Abdullatif Al Shelash says the properties Saudi Arabia is now offering in its real estate portfolio are so cutting edge that it’s in a league all its own.
For Many Saudis, Home Sweet Home Has Been a Long Time Coming
Knight Frank’s 2022 Saudi Arabia Real Estate Market Survey states 57% of Saudis are on board with becoming first-time homeowners.
It’s a milestone in life that Al Shelash says he doesn’t take lightly, and through Saudi Home Loans and Alaqtar Real Estate Development Company, he hopes to make that dream more attainable for all Saudi people.
He says he fought to help make mortgage laws a reality in Saudi Arabia, which didn’t happen until 2012, although he was pushing for it in 2008, during the subprime mortgage crisis.
“We were taking the mortgage laws from government hall to government hall being the lobbyist for that industry to start kicking,” Abdullatif Al Shelash recalls.
The financial executive is no stranger to taking the reins regarding leadership. Al Shelash studied at Purdue University in Indiana and, with nearly two decades of experience, has always been a proponent of motivating others. He says he believes people can do much more than they realize, including becoming a first-time homeowners. While the dream seemed out of reach in years past, Abdullatif Al Shelash says Saudi Home Loans has more options than ever to assist Saudis with the financial tools they need to unlock the door to mortgages.
There’s no longer the burden of front-load the cash for a property. On saudihomeloans.com, there are various resources to plug in numbers and see what one qualifies. There are also verified property search options available, so theoretically, a home purchase transaction can be made at one’s fingertips. From a four-bedroom, five-bath villa in Riyadh to a nine-bedroom villa in Jeddah, there are plenty of options in Saudi’s current real estate market to suit clients’ ever-evolving needs.
It’s a vastly different scenario from the days of living at home with parents and saving for years before the financial ball could even get rolling — and Sheikh Abdullafit Al Shelash is proud to have played his role.