King Khalid Uiversity
The Research and Consulting Studies Institute at King Khalid University (KKU), has recently released a study considered an addition to the real estate market of Asir region in particular and housing section in general. The study handled the factors that affect property prices in Asir region, and it highlighted the most important challenges and obstacles in this sector. Thus, officials, investors, and decision-makers in the housing sector could take appropriate decisions.
The study turned to the continued speculation in land market and housing, rather than investment, in addition to continued demand due to the increased number of people who are interested in housing, in rising construction costs, and in the lack of systems to contribute and to support developers, and to encourage them; the lack of which are the main reasons that contributed to the rise in real estate prices in the region in the previous period. It is interesting to consider that the logical reasons for the increased prices of real estate are such as property location, its proximity to health facility, municipality, and educational services. The size of the property came in the second place of the reasons for the high prices. The least important reason was the influence of customs and traditions in the purchasing decision.
The study pointed to the challenges facing the real estate sector in Asir region. In the forefront of these challenges was investors' and consumers' difficulty to get loans, both in real estate development and bank loans fund, due to the high cost of the loan rate which is insufficient for the development of the property due to high prices. Another challenge was the topographical nature of the region, social customs, and the composition of the Saudi family.
The study: reducing the costs of construction by the development of housing models, architectural diagrams that are alternative for traditional villas and duplexes
The most important recommendations of the study regarding funding was in modifying Real Estate Development Fund system, in a way to let commercial banks finance the construction of private housing system, and to take into account when repayment of a loan, the beneficiary's income, so that it will be within the range in value repayment of 10% for those with low incomes, rising to 30% for those with high income. The study also recommended an increase in the amount of housing loan, and the allocation of a percentage of the net profits of the national investment funds, to real estate development companies in support of public housing projects in return for the privileges and facilities.
The study also proposed the establishment of a specialized financing subsidiaries of banks or independent financial units to fit in with the new regulations and policies, and the formation of a national body as well, for social responsibility for housing to strengthen the charitable sector and private sector initiatives in support of the housing issue.
According to the work to increase the supply of suitable land for housing, the study recommended an inventory of all the nearby towns, villages, and lands, in order to be slated to be residential schemes. In addition, the procedures should be facilitated in the secretariats and municipalities to adopt their plans and to consider providing monthly support for applicants who have no private dwelling. The study also called for identification of agricultural land in the middle of cities and its outskirts. Such currently used arable agricultural land can be converted to residential land.
With regard to reducing the costs of construction, the study further called for the development of housing models, architectural diagrams that are alternative for traditional villas and duplexes, in addition to pushing the private sector to provide alternative and economical construction materials. The study also called for the setting up of a Saudi Building Code; to include the Green code as an environment friendly direction, and the community role of universities. The study called on engineering and architecture colleges, as well as research centers to carry out scientific role in this area, in terms of preserving geometric designs fit the needs of the community at a lower cost.