Expatriates living and working in Saudi Arabia are now allowed to buy real estate, based on a recent new report.
Chairman of the Shoura Council, Abdullah Al-Ashiekh, put agreements in place within the investment and real estate laws during session 77 permitting foreigners residing in Saudi to own property, according to reports from Arab News.
After the meeting secretary-general Muhammad Al-Ghamdi stated that the proposal saw unanimous approval. The committee for Economic Affairs and Energy within the Shoura Council put forth the proposal that expats residing in the Kingdom be able to buy Saudi real estate.
Current research from Deutsche Bank AG states that Saudi Arabia requires the construction of 1.2 million new residences by 2015. Saudi is the largest economy in the Middle East.
An economist based in the Kingdom noted that this move allowing resident expats to own land and property will make little difference to the real estate market within Saudi.
A chief economist at Banque Saudi Fransi, John Sfakianakis noted in a report for Arabian Business that the ruling is not likely to result in a jump in sales due to the limited access to mortgages, which must first get Saudi Cabinet approval.
He added that expats are unlikely to find properties easily, given the fact that Saudi nationals are having difficulties locating affordable residences.
Stefan Burch, the associate director for Bahrain real estate agency Cluttons, stated that if foreign businesses were included in the new law that move could cause a boost in the commercial real estate market.
Investors from overseas and other regions are likely to consider acquiring offices and retail properties in an effort to gain exposure in the Saudi Arabia. The Saudi economy is setting up to be the leader in economic recovery around the Gulf for the next few years, according to Burch.
Many analysts are stating that better access to mortgages and home loans is of utmost importance in the market overhaul.
The number of Saudis who own their own home is under 35 percent. Based on data from the researchers at RNCOS, young buyers can expect their mortgage costs to represent around 41 percent of their monthly income.Paul Holdsworth, Staff Writer, Gulf Jobs Market News