Diversifying the Saudi Arabian economy has been on the Kingdom’s agenda for a while and when it outlined plans earlier this year, property was marked out as a major area for growth.
The National Transformation Plan identifies the property sector as a key player in reducing Saudi Arabia’s dependence on oil, with both the public and private sector encouraged to take a role in ensuring the growth of the property sector through a number of initiatives. These are:
Stefan Burch, Head of Knight Frank KSA, believes these plans will indeed help boost the real estate sector in Saudi Arabia. He commented: “Over the medium-to-long term these development strategies are expected to transform cities for the better, improving the quality of life while maintaining affordability and safety of the local communities. In the short run, the approval of a white land tax on undeveloped land is expected to see land owners review their holdings and portfolios in order to be well positioned in light of the proposed tax. Meanwhile, others might seek to sell their sites which should help reduce land values and consequently make development more feasible. This in turn is likely to increase development activity across the Kingdom.”