Saudi Arabia property management specialist announced that the country lagged behind its Gulf neighbors in liberalizing its real estate sector and activities   . As a consequence, the kingdom's property development companies, while posting impressive profits, have not so far experienced the hyper-growth that has been achieved in other Gulf states.
Many of the larger Saudi firms have actually made some of their largest investments outside of the kingdom. Al Oula is in Egypt developing a new diplomatic quarter in Cairo. The project has been embraced by the Egyptian government and a number of embassies and additionally Al Oula is focusing on Syria and Jordan.
Many of the larger Saudi firms have targeted the United Arab Emirates, lured by a more open market and higher returns.
Al Hanoo, one of the kingdom's leading real estate developers, formed a $136.2 million company called Ewan to build and sell the first phase of Star Islands, the largest commercial, residential and tourism development project in the emirate of Sharjah. Another major Saudi company, Tanmiyat, acquired the residential and commercial components of Legends, a $2 million theme park and resort development in Dubai.
Nevertheless the real estate business in the kingdom is gathering pace. High oil prices are leading to increasing personal prosperity for many Saudi citizens and a great deal of liquidity.
With a population of 27 million to cater for, the kingdom certainly has a much larger real estate sector than the other Gulf states, and so has potential for far greater returns on investment.
Economic expansion has also increased the need for accommodation as expatriates arrive in the established industrial centers of Yanbu and Jubail and the newer sites growing at Rabigh and Ha'il.
Dr Saleh Al Habib, executive director of Jiwar, a leading real estate company, points out that 60 percent of Saudi citizens do not own a house.
“They may not own a house, but the money is there to do so,” he says. Furthermore, with an estimated 60 percent of those citizens aged under 25 and the population growing at the rate of 7 percent a year, the demand for new homes is rising fast.
Al Gahtani of Al Oula maintains that it would be no exaggeration to say that the real estate sector in Saudi Arabia is second only to oil in terms of its economic contribution.