خاص

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COLLEGE OF BUSINESS
ADMINISTRATION SATTAM BIN
ABDULAZIZ UNIVERSITY KINGDOM
OF SAUDI ARABIA
Candidate's Declaration
I hereby declare that the work presented in the Graduation Project entitled
"A Study on Housing and Housing Problems in Saudi Arabia" in the partial
fulfillment of the requirements for the award of the Bachelor of Science in Business
Administration (BSBA) and submitted in the Department of Finance, College of
Business Administration, Salman Bin Satttam University, Al-Kharj, Kingdom of
Saudi Arabia is an authentic record of my own work carried out during a period
of October 2015 to December 2015 under the guidance of Dr Abdul Samad
Mohammed, Asst. Professor, Department of Finance, College of Business
Administration, Sattam Bin Abdulaziz University, Al-Kharj, Kingdom of Saudi
Arabia.
The matter presented in this Graduation project has not been submitted
by me for the award of any other degree of this or any other institute.
( Mohammed Abdullah Faisel Al-Qahtani )
This is to certify that the above statement made by the candidate is correct
to the best of my knowledge and belief.
( Dr. Abdul Samad )
Project Guide
Date :
The Graduation project presentation of Mohammed Abdullah Faisel Al-Qahtani ,
has been held on ……………………
Signature of Supervisor

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Acknowledgement
My deepest gratitude goes to my project guide Dr Abdul Samad
Mohammed, Asst. Professor, Department of Finance, College of
Business administration, Sattam Bin Abdulaziz University, for his advice,
guidance supervision and untiring support throughout the study. Inspire
of his busy academic schedule, Dr Abdul Samad Mohammed, has always
been kind to spare his valuable time for me, whenever I needed it. It is
because of his involvement and constant encouragement; I am able to
complete this work. It is indeed a privilege to work under his supervision.
I am indebted to supervisor , Dr Nabel Malel and other academic
Factually members at department of Finance , college of business
administration , Sattam Bin Abdualziz University for their helping and
co-operative nature.
I am grateful to the stuff members of the department of Finance ,
college of business administration , Sattam Bin Abdualziz University , AL
KHARJ , Department Library , Computer Laboratory and Office for their
cooperation and help.
I wish to thank to my friends and colleagues for their moral support ,
camaraderie , help to keep things in perspective and for their loving
support during my stay and lifting the moods whenever they arrived.
I would like to express my reverence and great admiration for my
patents , who have always been the guiding and encouraging force for
me. Above all , I am highly indebted to almighty God who blessed me
with spiritual support and fortitude at each and every stage of this work.
Mohammed Abdullah Faisel Al-Qahtani

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Abstract
Chapter 1 Contains an introduction to the project work. This
chapter deals with the problems of the study , data , methodology ,
scope of study and the objectives of the study.
Chapter 2 Provide literature review. Some of the previous work
carried out in the relevant area are covered in this chapter.
Chapter 3 Deals with an overview of the housing scenarios.
Various aspect is provided in this chapter like the housing scenario in the
global , in the Gulf Council Countries , and in the Saudi Arabia.
Chapter 4 Deals with an overview of the real estate companies in
Saudi Arabia. Various companies are discussed in this chapter.
Chapter 5 Discussed the bank profile in how they offering a house
loan to the citizen in Saudi Arabia . There are a some of the banks in KSA
are discussed in this chapter.
Chapter 6 Present the data analysis , result and discussion.
Each Question is taken separately and showing the percentage of each
answer. This chapter contains all the questionnaire of the affordable
housing in Saudi Arabia. Detailed graphs of the questionnaire result are
presented. Offers conclusion. It is a summary of the work and result.
Chapter 7 References of the project.

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Content
Title Page No.
Declaration 1
Acknowledgement 2
Abstract 3
Contents 4
Chapter 1
INTRODUCTION
1.1 Introduction 7-10
1.2 Research Problem 11
1.3 Scope of Study 11
1.4 Objectives 12
Chapter 2
Review of Literature 13-15
Chapter 3
Housing Scenarios
3.1 Housing Scenario Globally 16-21
3.2 Housing Scenario In Gulf Council Countries 22-28
3.3 Housing Scenario In Saudi Arabia 29-32

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Chapter 4
PROFLE OF REAL ESTATE COMPANIES
4.1 Kingdom Holding Company 33
4.2 Jeddah Economic Company 33-34
4.3 Olayan Real Estate Company 35
4.4 Zamil Real Estate Company 35
4.5 Dar-Al-Arkan Real Estate Development Company 36
4.6 Saudi Binladan Group 37-38
Chapter 5
PROFILE OF BANKS OFFERING HOUSING LOANS
5.1 Introduction 39-41
5.2 SAAB Bank 42
5.3 AL-AHLI Bank 43-45
5.4 AL-RAJHI Bank 45-46
5.5 Housing Schemes In Saudi Arabia 47-48
Chapter 6
ANALYSIS AND FINDINGS
6.1 Analysis 50-73
6.2 Conclusion 74-80
6.3 Appendix 81-87

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Chapter 7
REFERENCES
6.1 References Of The Project 88
6.2 References Of The Review Of Literature 89-90

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Chapter 1
Introduction :
Saudi Arabia has a shortage of owner-occupied residential housing,
particularly at the lower end of the income scale. In this research we will
consider the structural factors that have contributed to this situation,
along with the likely impact of the proposed mortgage law.
First, we will briefly consider the role of housing and home
ownership in an economy.
Housing is a key building block for economic development The
availability of housing increases labor mobility and hence employment
potential. Housing construction itself is labor-intensive and has a high
multiplier effect given the necessary auxiliary investment in roads,
electricity, sewerage, and water. Beyond this, home ownership
promotes wealth accumulation for lower-income families by enabling
them to more-readily build wealth through home equity growth. Home
ownership provides the
Best and most secure collateral against market fluctuations and
other borrowing, and yields a positive rate of return in the long run. By
creating stakeholders who demand or make additional investments in
their communities—in schools, parks and shops, for example—home
ownership can also encourage a better quality of life.
Housing markets tend to be illiquid In principle, real estate is both
an investment and consumption good. It can be purchased with the
expectation of attaining a return (an investment good), or with the
intention of using it (a consumption good), or both. Thus, a renter would
consume housing, while an owner-occupier would both
Invest in and consume it. The dual nature of the good means that it
is not uncommon for people to overinvest in real estate—that is, to
invest more money in an asset than it is worth on the open market. This

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phenomenon was evident in the US and some Western European
countries in recent years.
The main determinants of the demand for housing are
demographic, although other factors such as income, price of housing,
cost and availability of credit, are also influential. The core demographic
variables are population size and net population growth, though family
size, age composition of the family, marriage rates and net migration, all
play a role. Most real estate markets are illiquid, and the process of price
adjustment is slow because of the amount of time it takes to finance,
design, and construct new supply, and also because of the relatively
slow rate of change of demand. As a result of these lags there is a great
potential for disequilibrium in the short run.
Comparatively speaking, Saudi Arabia has the largest real estate
market in the GCC states, with more commercial (office, retail and
residential) floor space than all of the other GCC countries put together.
The current stock of commercial space is planned to increase manifold
with the residential sector also poised for significant growth.
Talking of the huge demand for residential units, several
businessmen and real estate investors have moved to buy plots of lands
to build residential apartments. This has also prompted several real
estate investors and businessmen to join hands in building apartment
blocks and sell flats under a lease program ending in ownership.
There has already been a boom in the real estate sector following
the recent Royal Decree issued by His Highness King Abdullah Bin
Abdulaziz, Custodian of the Two Holy Mosques to increase the limit for
personal loans from the General Housing Authority and the Real Estate
Development Fund from SR300,000 to SR500,000.

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Although the Kingdom is witnessing huge developments in the
construction sector, the housing market still suffers from a large
demand-supply gap due to the rapid expansion of the expatriate
community along with the domestic community and rapidly declining
household sizes.
"The Saudi housing market offers enormous potential for growth as
it unlocks its potential. Housing is primarily driven by domestic drivers of
demand. Young Saudis are in search of affordable housing throughout
the country which remains under-supplied. However important steps are
taken by the government to address supply mismatches," said Engineer
Fahed Bin Mohammad Al Moutawe, CEO of Ewaan Global Residential
Company, the leading real estate development company in the Kingdom
of Saudi Arabia which is constructing the Alfareeda Residential Project
currently being built in the north of Jeddah city.
Under the new Saudi Arabian Law, foreigners are now entitled to
allow a 100 per cent ownership of real estate properties in the Kingdom.
This allows for a more influx of funds and investment into the country
and helps further the development of real estate industry in the country.
Moreover, the majority of the Kingdom's populace does not have
their own houses and live in rented accommodation. As a result, Saudi
Arabia will need to construct over 1 million houses by 2014. This
demand could further escalate if the mortgage law to ensure easy
financing gets its final approval.
"The mortgage condition will certainly be key to prospective market
growth. With this mortgage law, prospective buyers will be integrated in
the target market and consequently, the potential of the residential real
estate will get bigger in Saudi Arabia. This will on the contrary change
the decreasing investment trend seen during the past decade.
Particularly, Jeddah and Makkah are likely to record much higher growth

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levels than the other cities of the Kingdom, largely because of the
current pent-up demand," added Engineer Fahed Bin Mohammad Al
Moutawe.
With the growing needs of a young population, the housing market
in Saudi Arabia has shifted its focus from palaces and luxury villas to the
needs of a changing society. With a population of more than 27 million,
the Kingdom is notably the most populated country in the Gulf. Demand
for housing surpasses the supply and in the coming years, demand for
affordable housing will go on outstripping for luxury villas as the
majority of the population have enough money for housing units in the
range of SR0.8 million and SR3.5 million.

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Research Methodology:
The data for the current study is from the secondary and primary
sources. The study did an intense review of various studies on the crisis
in the real estate market of KSA.
The primary data was collected by administering a questionnaire to
the cross section of Saudi citizens.
Scope of Study :
The present study was conducted in the Riyadh region of KSA, and
the realistic responses from respondents were 140 in number out of the
sample size of 200.

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Objectives
 To study the real estate market in KSA.
 To study the crisis in the real estate market of KSA.
 To suggest possible solutions for the crisis in the real estate
market of KSA.

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Chapter 2
Review of Literature
Abdallah Ben Rubeian (2014) , It seems that allocating 250
billion Saudi riyals [$67.5 billion] to support housing projects and solve
the housing crisis in Saudi Arabia has been ineffective and inadequate.
The Housing Ministry still has no clear plan to resolve the crisis, despite
all that has been written and said. While many promises have been
made, all that the ministry has done to date does not suggest that the
housing crisis will be solved anytime soon.
The ministry started its projects by building 500,000 housing units,
and it did not succeed in achieving that. Then came the “land and loan”
policy to save the ministry from the mess. But the ministry did not learn
from its mistakes. It started making promises and proclaiming that the
solution lies in adopting the merit mechanism from the council of
ministers.
Marwa Rashid, (2013) , Saudi Arabia's government has
launched a new scheme to provide housing aid to its citizens, in the
hope of ending a shortage of homes which has depressed living
standards and is politically sensitive for the government.
After social discontent prompted uprisings elsewhere in the Arab
world in 2011, King Abdullah announced a plan to build 500,000 homes
in Saudi Arabia over several years. Some $67 billion of state funds were
earmarked for the plan.
Youssef Alkwylit , (2003) warned in the newspaper "Al-Riyadh"
The housing crisis in Saudi Arabia will blow up several other crises, and
that the statistics published by King Abdullah bin Abdul-Aziz Foundation
for Developmental Housing put us in front of the bell serious warning

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that, and that solutions do not address the situation of its roots, but left
perceptions not up to the fact analysis, and in the article "The crisis will
blow up crises!" The writer says, "that issued by King Abdullah bin Abdul-
Aziz Housing Development Foundation that 60 percent of Saudi families
homeless and assume a house for those families (125) square meters in
wide-dimensional environment and this size is a must to take the
attention much higher because this figure scary and scary, and when the
organization believes it is impossible to take a loan deduct 50% of the
salary of a mortgage a month unless the salary (12,000) Real make any
installment (6000) and this is what is not as long as the average salary of
a high percentage of citizens do not exceed the payment of the premium
amount required, and this the imbalance will continue what plans have
been developed this fact and its implications for the future of the family
and her life takes into account in building a generation without financial
hardships or crises and function and the salaries of low-habitation ".
Sultan Muhanna Al-Muhanna , (2013) , Housing in its entirety
needs to complete systems can deal with the different aspects affecting
the housing .
Whether in the planning stages, programs or implementation or
follow-up and evaluation or management. It has been specialized to the
problem of housing local and international organizations and research
centers working in all aspects that affect the housing statistics, research
and publication and meetings at scientific conferences with the
exchange of experiences and information and that the search for
solutions is an ongoing process not subject to individual interpretations
or personal opinions ... and always finds planners and Applicants The
publishing solutions for their projects either in the design or
construction standards ways that are commensurate with the various
communities or identify needs or costs account ... or search for new
methods of construction or furniture.

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Jeff Roberts , (2010), Despite Saudi Arabia’s vast oil reserves,
multibillion-dollar budget surpluses and ambitious economic cities, real
estate development plans in the kingdom are not quite as advanced as
they first appear. Although luxury waterfront villas and gated
communities cater to a small percentage of the Saudi population of
around 22 million, research suggests a growing number of people across
the kingdom are suffering from a housing shortage that is getting worse.
Dominic Dudley , (2009) , Riyadh is starting to feel a little too
crowded for some locals these day, with complaints about traffic jams
now a regular feature in the newspapers. Unfortunately for the city’s
commuters, the problem is going to get worse before it gets better as
work ramps up on a six-line metro network this year. Despite promises
from the consortia building the network to keep disruption to a
minimum it is inevitable that there will be road closures and diversions
across the city between now and 2019 when it is due to be completed.
Carol Fleming , ( 2010 ) , Ideally when accepting a job to
work in Saudi Arabia, not only will housing be part of the standard
compensation package, but the employer will also provide the housing.
However in some cases the employee will receive a housing allowance
and is responsible for finding his or her own housing. If one is given an
option between receiving housing or a housing allowance, my
recommendation is to accept the housing.

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Chapter 3
Housing Scenario
Housing scenario Globally :
We live in turbulent times. It is an era of astounding change, where
we are becoming almost accustomed to fantastic feats of technological
wizardry, medical marvels and spectacular scientific breakthroughs.
Crucial questions are posed at a global level about demography, natural
resources, the environment and human culture. While some things old
in these areas are coming apart it the seams, other new things are
emerging. The boundaries between disciplines, industries, sectors and
social enterprises are becoming ever more blurred. Everything, we are
told, affects everything else. As the boundaries fade and the networks
grow, so the need for a more enlightened, holistic and future orientated
understanding of events, issues and opportunities arises. In this
complex, chaotic and uncertain world, the real estate industry can
scarcely be exempted. More than ever before, there is a call for leading
thinkers in the property field to look around and look ahead. Global real
estate scenarios do not claim to have provided the answers to the
future, nor are they a reliable predictive tool. The purpose is to raise
awareness. We live in turbulent times where major, or even minor,
events can radically change our lives. Success will depend on being
prepared for the unexpected.
The Driving Forces of Change All the dimensions of change
Frequency, magnitude ,complexity, rapidity and visibility – are
happening at an ever-accelerating pace. In the past, there has been a
discernible pattern to change. This time, however, it is different, for
change is far less sequential and certain, showing much greater
discontinuity and unpredictability .To get a vision of real estate in the
future, it is first necessary to gain a vision of society in the future. This
requires an understanding of the forces – cultural, demographic,

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economic, environmental, governmental and technological – that are
driving change.
Cultural change
• Twin forces – homogeneity and diversity – are at play in
transforming society into something new and unexpected. On the face
of it contradictory, but in fact mutually supportive, the first is leading to
an awareness of the second. The greatest threat to future world order
and peace is the potential clash of civilizations, not of countries. Future
flashpoints will lie not along national boundaries, but where different
civilizations meet.
• A new business culture is emerging – one that is based as much
on principle – centered leadership as it is on the pure profit motive. The
21st century will see the culture of universal education for all people,
worldwide, and throughout their lives.
• There is a changing culture of healthcare stemming from such
issues as new medical discoveries, alternative or complementary
treatments, the duties and rights of patients and the roles and
responsibilities of providers.
• Advances in information technology raise cultural questions
about security, surveillance, control, access, privacy, crime, taxation,
propaganda and social colonization.
Demographic change
• The world’s population is growing, moving and getting older.
• Income disparities between rich and poor nations continue to
grow in a world of around 4 billion poor people, 2 billion aspirants and
something over a billion citizens of wealthy nations. The first group
creates less than 1% of world product, while the last creates over 85%.

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• The average age is increasing in the “industrialized” world and will
be around 40 by 2020.
• A “grey” future is faced by most industrialized nations as their
populations age and elderly dependency ratios rise.
• Immigration will become a crucial issue over the next 20 years, as
a tidal wave of people seek to surge from developing to developed
countries.
• The phenomenon known as “the global teenager” will become a
powerful demographic force. Connected, communicating, concerned,
cyclical, idealistic, ambitious, global youth could exercise enormous
social, economic and political power - but in what direction?
• The next 10 years will witness about half the world’s population
living in urban centers, almost 400 million people having homes in the
biggest 25 cities, and well over 300 cities in the developing world will
have a population of over a million.
Economic change
• A radical restructuring of the world’s economic order is taking
place. Economic globalism is the name of the game. The dynamics of this
new economic world, however, are largely untried, decidedly uncertain
and little understood.
• Capitalism is the only economic system that has been seen to
work anywhere, but even its foundations are shaking with the speed and
force of change, so that the
eternal verities of capitalism – growth, full employment, financial
stability, rising real wages – are threatened.
• The third of humanity, and the quarter of the landmass, which
was previously communist, is joining the old capitalist world with serious
problems in such sudden assimilation.

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• There will be a continued shift to an era dominated by
“brainpower” industries.
• Advances in technology, transportation and communications are
creating a world where anything can be made anywhere and sold
everywhere.
• The 21st century will be a period where there is no dominant
economic, political or military power, and no single country able to
design, organize and enforce the rules of the economic game.
• The main foundations underpinning economic growth will be the
development of a ubiquitous digital economy, increased research and
innovation, and improved skills and knowledge of the workforce.
• Above all, the businesses that flourish in the 21st century will be
those that master the art of getting information to and from their
customers.
• A new financial architecture in terms of global standards,
regulation, compliance, taxation, risk assessment and corporate
governance, will emerge.
Environmental change
• Environmental issues will form a major dimension of change and
the concept of “sustainability” will increasingly dominate the
formulation of public policy at all levels.
• Four basic questions will constantly be addressed: Is there a
crisis? Can the world feed itself? Is there enough water? Will there be
sufficient energy?
• Top of the environmental agenda will be the issue of global
warming, with consequent climate change and rising sea levels, resulting
from high levels of greenhouse gas emission due to fossil fuel burning
and land use change.

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• There will be a steady growth in the number of environmental
policy instruments introduced at international, national, regional and
local level.
• Attention will increasingly be focused on the shape, density and
functioning of cities.
• Organizations, of all kinds, will progressively have to demonstrate
a sound and effective approach towards environmental resource
management, and improved
performance.
Governmental change
• National governments throughout the world will become less and
less powerful. Power will be passed upwards to supra-national bodies,
and downwards to
• Fiscal and monetary policy will increasingly be determined by the
world’s financial markets.
• Governments generally will be expected to do less and not more.
• The accent by government will be placed on regulation to secure
effective, efficient and equitable provision of services.
• Persuasion will accompany regulation through better public
education, public relations and public disclosure.
• Electorates of the developed world will be more and more
disinclined to vote for increased taxation.
• Social security and welfare systems will come under greater
pressure, with a growing tension between those in work and those not
working.
• User charges, for erstwhile free or subsidized public services, will
be more common.

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• Cities will emerge as the critical focus of economic activity, of
governance and of social organization for the future.

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Housing Scenario In Gulf Cooperation Countries ( GCC ) :
Home ownership is a basic desire everywhere, including in the
countries of the Gulf Cooperation Council (GCC). However, the GCC is
facing a large housing gap, despite its relative affluence. Although
several GCC governments are currently building developments aimed
primarily at low- to middle-income households, these programs are
unlikely to yield the socioeconomic gains the region needs. Experience
shows that short-term policies to provide low-cost homes en masse are
not sustainable and result in a large stock of low-quality housing that
replicates the environmental problems of past decades. In addition,
these programs are often driven by government agencies with minimal
involvement by the private sector, leading to slower construction and a
less sustainable and lower quality housing sector overall. Instead,
policymakers should pursue a strategy in which housing and
socioeconomic policies come together in a holistic approach that builds
communities instead of just housing. To implement such a strategy,
government housing policies should aim for sustainable development
through environmentally friendly building standards and they should
improve urban communities by adopting new planning practices.
Governments should also engage private-sector developers through
public–private partnerships (PPPs), which can allocate resources more
effectively and transfer knowledge from private developers to
government agencies. Moreover, prudent real estate laws (such as
properly protecting the property rights of owners and residents) and
access to capital will be important if GCC housing policies are to achieve
higher ownership rates and socioeconomic gains such as greater income
equality.
Given the severity of the housing shortage — and the current
efforts of GCC governments to achieve other socioeconomic goals, such
as reducing unemployment and weaning residents from their
dependence on the state — a better approach to the provision of
housing is needed. Rather than focusing simply on bricks and mortar,
GCC housing policies should aim to build vibrant communities, create

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jobs, enhance social welfare, and ensure a healthy environment. The
right housing development strategy can lead to gains in each of these
areas. Governments need not invent this strategy from scratch. There
are success stories elsewhere from which GCC governments can derive
lessons, such as PPPs in Morocco, Singapore’s Housing and Development
Board, and Hong Kong’s use of environmental building practices. These
programs have resulted in successful housing projects, such as shared-
use complexes that combine housing, retail space, and office space,
along with recreational and educational facilities, green space, and
access to public transportation — all built with environmentally sound
designs.
Five factors will be critical to making public housing policy more
effective.
Apply sustainable urban planning and design principles Fundamentally
The right approach includes principles of sustainable urban
planning and design, including mixed-use developments that feature a
combination of residential, commercial, educational, and civic space.
Such developments foster a sense of physical and social community.
They provide open space that displays the community’s natural beauty,
along with easy access to transportation and social infrastructure. They
have amenities such as retail and work spaces within a reasonable
distance, to minimize the use of cars. Financially, the right design can
retain or increase the value of the properties being developed. It also
creates a range of employment opportunities both within and near the
community, which helps advance the socioeconomic status of residents.
Studies suggest that sustainable housing can deliver a range of
environmental benefits. Many buildings in the GCC region — and their
occupants — are notoriously inefficient in their use of space and energy.
Much of the high electricity consumption in these countries is
residential. In Kuwait, for example, residential usage represents more
than 65 percent of overall consumption. Yet solutions are available. For
example, sustainable elements such as proper insulation for external

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walls and roofs, double-glazed windows, and fitted shade devices can
reduce annual household electricity consumption by about one-third.5
Similarly, mixed-use zoning leads to numerous environmental
advantages; the most significant is a decrease in car travel, which can
greatly reduce air pollution and CO2 emissions. Access to public
transportation allows for greater mobility of residents, both within and
outside the community, and reduces pollution. Including design
components such as green spaces helps foster biodiversity and a vibrant
ecosystem.
Leverage public–private partnerships
Although, the public sector cannot solve the housing shortage on
its own, handing it off to commercial developers is not a realistic
alternative. Instead, PPPs are a potential solution that can lead to a
faster and more sustainable response. PPPs have already been used to
build necessary infrastructure and provide more effective public services
in areas such as healthcare and education. Structured correctly, such
partnerships can combine the investment funds and expertise needed to
execute and manage housing projects. They allow government assets to
be allocated across more projects. Also, they can build public-sector
capabilities by transferring know-how and expertise to relevant
government agencies, thus helping streamline the delivery process. As
with other areas where the public and private sectors intersect, this
form of cooperation will require mechanisms to ensure transparency
and efficiency. The Moroccan government, for example, has successfully
partnered with the private sector to help address the shortages in
affordable housing.

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Strengthen housing finance
Another structural limitation is the access to home financing in the
region, often because of underdeveloped financial markets and
regulations. In some cases, collateral requirements are extremely high.
For example, a mortgage borrower in some GCC countries must sign a
check for the total mortgage amount. Yet Shari’a (Islamic law) can
prohibit most banks from reclaiming a person’s house, even if the owner
defaults on a mortgage payment. As a result, many banks are hesitant to
extend mortgages. Governments often respond by providing soft loans
through local banks or government agencies. Such practices, while well-
intended, often erect new hurdles to the process of buying a home. Few
governments in the region have rigorous data on housing and
population characteristics (e.g., income, age, and social status). Similarly,
few have any kind of equitable distribution mechanism (i.e., targeting
households that are most in need). As a result, loans are unevenly
distributed. In Saudi Arabia, for example, the waiting time for loans can
reach 18 years. Yet implementing a new prioritization scheme — such as
a points system — can be difficult to sell politically. Government
bureaucracies also scare away commercial lenders. Governments have
an inherent interest in encouraging the private banking system to play a
lead role in financing house purchases. A vibrant residential mortgage
market would lead to higher home ownership and growth in the real
estate sector, and most important, would reduce the burden on the
government to increase access to housing. Addressing this challenge
requires a two-part solution. The first regards finance — governments
must develop financing schemes that more effectively target low-
income households, allowing them to purchase adequate and affordable
housing. The second is the legal aspect — mortgage laws must be
revamped to offer protection to low-income households, while still
preserving the rights of lenders.

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Diversify housing programs
Most GCC governments’ housing programs offer limited types of
assistance. The existing programs offer either land, direct financial
support, or a housing unit. This limitation has two drawbacks. First,
there is a mismatch between assistance and need. The current programs
assume that all applicants need a new housing unit. However, applicants
may already have access to existing housing units, such as their parents’
home, that require renovation to accommodate the growth in the
family. This mismatch may lead to the waste of valuable resources, and
missed opportunities to renovate existing units, some of which are
historic. Second, there is limited access to existing programs. Most of
these programs require the beneficiaries to repay over time the value of
the benefit. In some circumstances, the applicant’s income does not
allow the person to be a homeowner, leading to a denial of assistance.
Offering rental assistance programs would lead to better targeting of
assistance and more efficient use of resources. A large menu of
programs can be used by governments to ensure proper targeting and
efficient use of resources.
Implement efficient management
Housing programs are ambitious and will not succeed without
clear oversight in both the short and long term. A few countries with
successful sustainable housing policies, such as France and Singapore,
have created specialized agencies to deal with the supply, maintenance,
and management of public housing. For example, a specialized agency
can evaluate housing applicants to ensure that those who best meet the
eligibility requirements actually receive housing. In addition, these
agencies can ensure the adequate maintenance of facilities, to establish
a consistent and equal standard of housing over the years. Furthermore,
human capital is an important factor in housing management. The right
expertise must be in place within the different departments and
branches of the housing department. Experts with legal, technological,
research, and statistical experience, for example, can help manage the

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mismatch between demand and supply. To succeed, however, housing
programs need efficient and transparent institutional support that can
implement, monitor, and assess them. On the legal front, laws that
guide the actions of both tenants and owners can be especially useful in
ensuring the maintenance of housing units, well as the overall real
estate market mechanisms. As such, effective property management can
act as a buffer between owners and tenants, ensuring that all parties
involved are sufficiently engaged to guarantee best practices within the
housing market. In order to maintain the stability of the real estate
sector and attract investments for its development and growth,
governments must ensure the rights and responsibilities of landlords,
tenants, investors, and property service providers. A real estate
regulatory agency, similar to the Real Estate Regulatory Agency in Dubai,
is one approach to efficiently carry out this task. Such a body is able to
license, organize, and manage all real estate activities, real estate
agents, and developers’ trust accounts, along with rental and purchase
agreements. For example, by monitoring the fees demanded by real
estate companies, the agency can introduce more transparency and
accountability into the market, and eliminate incentives for some
people to pay or solicit extra for preferential treatment. In addition, a
regulatory body can regulate and supervise real estate associations and
media-related activities as well as circulate real estate research, studies,
and publications. It is also better able to maintain consumer and investor
confidence in the real estate market — a key priority for GCC countries’
growing real estate markets.

28
Each of the measures described in this report is insufficient alone.
GCC governments need to bring them together in a holistic approach to
develop sustainable policies that can relieve the current shortage of
affordable units and increase the socioeconomic benefits of public
housing. Instead of building mega-housing complexes using traditional
approaches, governments can redirect capital toward more
comprehensive solutions, and collaborate with private builders, banks,
and other stakeholders. In particular, these housing policies will provide
social inclusion, economic viability, and environmental sustainability.
The housing challenges in the region are profound. However, with the
right approach governments can transform these challenges into
opportunities to develop a vibrant and more affordable GCC housing
market, and so better meet the needs of the current and future
populations of the region.

29
Housing Scenario In Saudi Arabia :
30% of Saudi population own homes, global average 70%, UAE
home ownership 45% , 0.4 Million Shortage of households Demand 2.7
Million; Supply 2.3 Million , 1.0 Million homes to be created by 2015,
young and fast growing population, rapid urbanization and rising
personal income driving the demand. Construction industry in the
Kingdom on sound foundation and on the verge of major surge, says top
industry player The Saudi Arabia real estate industry is poised for
remarkable growth in the near future and is currently the fastest
growing construction industry across the Middle East. What with more
than $36bn of FDI and over $500bn of real estate projects already under
way, the Kingdom of Saudi Arabia presents one of the most lucrative
opportunities to tap into for regional and international real estate
investors.
The recent spate of developments in the Saudi Arabian real estate
sector are fueled by a robust economy of the Kingdom, and backed by
huge revenues from the oil sector leading to excess liquidity. More
importantly, one of the major boost to the sector is the liberalization of
property laws within the Kingdom. As per industry expectations, the real
estate sector's annual growth is expected to be maintained between
2011 and 2015 along the same rate. For its part, the Saudi Arabian
government has helped the cycle of growth through diversification. This
has helped in generating credit facilities and real estate investments,
leading to more construction and ultimately the demand has led to a
huge growth in the real estate sector.
One of the main drivers of the real estate market surge is the size
and rapid growth of population in the Kingdom. Saudi Arabia has been
among the fastest growing countries globally in terms of population over
the past decade. As a result, Saudi has a very young demographic profile,
with around 45% of the population currently aged around 20-25 years.
This young age profile and the rapid urbanization have been the major
demographic factors driving the real estate market.

30
Over all, the real estate scenario in Saudi Arabia is looking great,
with lots or promises especially in the next few years. As this upbeat
prediction remains, expect Saudi Arabia to be the bastion of real estate
development.
It seems that allocating 250 billion Saudi riyals [$67.5 billion] to
support housing projects and solve the housing crisis in Saudi Arabia has
been ineffective and inadequate. The Housing Ministry still has no clear
plan to resolve the crisis, despite all that has been written and said.
While many promises have been made, all that the ministry has done to
date does not suggest that the housing crisis will be solved anytime
soon.
The ministry started its projects by building 500,000 housing units,
and it did not succeed in achieving that. Then came the “land and loan”
policy to save the ministry from the mess. But the ministry did not learn
from its mistakes. It started making promises and proclaiming that the
solution lies in adopting the merit mechanism from the council of
ministers.
Unfortunately, the merit mechanism submitted by the Housing
Ministry and approved by the cabinet three weeks ago came with many
defects. It poured oil on the fire of already red-hot land prices. In other
words, the new policy exacerbated the problem it tried to solve.
The mechanism surprised people by requiring citizens to pay
between 50,000 and 150,000 riyals [$13,300-$40,000] for the land. This
came as a shock. Big landowners, who monopolized the large plots of
land, have obtained their land for free. And when the turn came for
needy citizens, they were required to pay a sum of money in return for
no one knows exactly what.
The new mechanism introduced to the already volatile market
those who had been outside it because they could not afford to buy a
home. The merit mechanism includes an income criterion and gives
priority to those with low incomes. That made it akin to a charity that
distributes housing, and not a lending mechanism to resolve the housing

31
crisis afflicting most of the middle class, including those with high
incomes.
For example, the mechanism gives the most points, that is, 20
(according to income) for those with a salary of only 3,000 riyals [$800] a
month. This means that someone making 3,000 riyals a month will pay
for a housing loan a little over 1,600 riyals [$426] a month for a period of
25 years. In effect, the mechanism violated another system preventing a
citizen from paying more than a third of his monthly income on a loan.
Perhaps the mechanism should have set a salary of 5,400 riyals
[$1,440] and above, so that the ministry could deduct the 1,600-riyal
monthly installments without the borrower paying more than a third of
his salary. For those with very low incomes, widows and the like, the
ministry could have set up a cooperative charity program instead of
adding that group of people to the ministry’s borrowers, either in
exchange for the land, the loan or both, where they do not repay the
loan because they can’t afford it.
A third point should be noted: A lot of people who did not benefit from
their ready-to-be-disbursed mortgage loans because they could not own
land had hoped to take advantage of those mortgages and that they
would be given priority. But the mechanism ignored that group of
citizens and didn’t provide them with land so that they could benefit
from the ready-to-be-disbursed mortgage loans from the real estate
fund.
This is a big deficiency in the mechanism. Someone who needed to
use his land and could afford a loan was not given a loan, while a citizen
with no land was given a loan. So the ministry has effectively added the
second group of persons to the first, and that made the situation worse.
The fourth point is that the mechanism has doubled the size of the
demand by bringing into the market those who had been outside it. It
did that before solving the problem of the land supply, which is the core
of the problem. By signing with commercial banks to give a citizen an
additional loan and by accelerating the spending of the real estate loan

32
fund, the ministry has poured oil on the fire. It supported the demand
side without a successful solution to the problem: the supply side.
Fifth and finally, the ministry postponed the solution to the supply
side by considering taxes on empty land within city limits. The ministry
has talked about that repeatedly for more than a year. Nothing suggests
that such a tax will soon be imposed.
The ministry should not have counted on a solution that is not in its
hands and that it cannot impose and that needs to be studied and
extensively debated by a number of agencies before approval, if it gets
approved at all.
It is worth recalling that the ministry has been working for four
years on a trial-and-error basis, which is not the way to resolve the
prolonged crisis. Both the ministry’s policies and programs currently
support the demand side and ignore the core and essence of the
problem: the supply side. Market reality has shown that every policy
taken by the ministry ended up raising land prices. If those policies
continue without solving the demand reality, not 250 billion riyals, nor
even more than that, nor tying people up with mortgages, will solve the
problem.

33
Chapter 4
Profile Of Real Estate Companies
Kingdom Holding Company :
The acquisition of high-value real estate, both in the Middle East
and internationally, has long been a priority for Kingdom Holding
Company.
KHC has a distinguished history of investing in iconic real estate
holdings and related concerns. Some are hotels but others are new
residential or business developments designed to attract global
attention. In some cases KHC takes a position in a project already
underway and supports it to completion, such as London’s ambitious
Canary Wharf development. Other projects are originally conceived and
commissioned, such as Jeddah’s recently announced Kingdom Tower,
Kingdom Riyadh Land Real Estate Project Jeddah Mega Real Estate
Project and Tower.
All, however, fit the KHC strategy of identifying the “best of the
best” worldwide, and promoting its interests by aligning KHC with the
concept of visionary and one-of-a-kind excellence.
Jeddah Economic Company (JEC)
Jeddah Economic Company Ltd., that was co-founded by Kingdom
Holding Company, in which it holds a substantial interest, is developing
the Kingdom City, Jeddah. The project will feature the over 1,000-meter
Kingdom Tower with approximately 5.3m square meters of new urban
development to attract business and tourism. The tower aims to be an
iconic marker of Jeddah’s historic importance as the gateway to the holy
cities of Makkah & Madinah.
Kingdom Tower Jeddah planning activities have attracted
worldwide interest. It will comprise more than 500,000 square meters of

34
floor space and feature a Four Seasons hotel, Four Seasons furnished
apartments, first-class office space and luxury condominiums. No official
floor count is yet supplied, but architects have stated there will be
approximately 50 more floors than the 163-floor Burj Khalifa tower in
Dubai, UAE. Kingdom Tower will also offer the world’s highest
observation deck.
Credit for the Kingdom Tower Jeddah vision goes to HRH Prince
Alwaleed, who was closely involved in all facets of the planning, design
and the selection of Adrian Smith + Gordon Gill Architects (AS+GG) as
principal architects. Prince Alwaleed, and the board were impressed by
the boldness and simplicity of the AS+GG design. Kingdom Tower’s
height is remarkable, and the building’s iconic status will not depend
solely on that aspect. Its form is brilliantly sculpted, making it quite
simply the most beautiful building in the world at any height.
The tower’s great height requires one of the world’s most
sophisticated elevator systems; the Kingdom Tower complex will feature
59 elevators, including 4 double-decker, and 2 triple- decker elevators.
Elevators serving the observatory will travel at a rate of 10 meters per
second.
The project also takes advantage of new energy conservation
technology. The tower is to feature a high-performance exterior wall
system that will minimize energy consumption by reducing thermal
loads.
The entire Kingdom City project on the Red Sea coast includes
residential units, commercial units, an international hotel, business
offices, educational centers, a diplomatic area, commercial centers,
entertainment and tourist facilities, and water sports activities, all within
a modern city located in a to be determined strategic location set to be
an attraction for business and tourism.

35
Olayan Real Estate Company Ltd:
Olayan Real Estate Company Ltd. (ORECO) was formed in 1976 as a
subsidiary of Olayan Financing Company to plan and coordinate the
Groups requirements and to acquire land and properties.
ORECO's activities were initially focused on the acquisition of land
parcels to cater to the Group's current and long-term needs. It has
evolved to undertake property development projects on its own and for
third parties. For example, in the mid-1990s ORECO developed its first
office and shopping complex, Riyadh's Dareen Commercial Center. The
complex houses the headquarters of two Olayan companies and a mix of
other office and retail tenants. ORECO has also developed supermarkets
for Safeway Tamimi. The company recently developed its second major
office and shopping complex, this one in Dammam on the Arabian Gulf
coast.
Zamil Real Estate :
This is the official website of "Zamil Group Real Estate Company".
We invite you to browse through this site to view the exclusive
residential and office commercial properties developed, owned and
managed by Zamil Group in Saudi Arabia and Bahrain.
Zamil Group real estate activities date as far back as the 1930s in
the city of Jubail, on the Eastern coast of Saudi Arabia and Al Manama in
Bahrain. The Group's diversification strategy focused on the services
sector, namely real estate which led to the formation of "Zamil Group
Real Estate Company" to develop and manage all residential and
commercial properties.
Zamil Group Real Estate Company operates prime properties in
very select locations in the cities of Al Khobar, headquarters of Zamil
Group, Riyadh, Jubail and Al Manama in Bahrain.

36
Dar Al-Arkan Real Estate Development Company :
Dar Al-Arkan Real Estate is a Saudi Arabian property development
company. It is the largest developer by market value in Saudi Arabia.
Based in Riyadh, it was established in 1994 by six business families with
real estate development experience in response to the demand for
housing from the rapidly growing Saudi population. From July 2002 to
January 2004, Dar Al-Arkan operated as a limited liability company with
a capital base of SR140 million (US$37 million). Dar Al-Arkan increased
its capital to SR5.4 billion (US$1.4 billion) through a private placement in
the domestic market in 2004 while converting to a partnership limited
by shares. Subsequent to the private placement, Dar Al-Arkan converted
to a joint stock company in 2005 (i.e. a company with a minimum of five
shareholders who are restricted from selling their shares (except with
respect to transfers to each other) for a period of at least two years and
can be listed on the Saudi stock exchange). The founding shareholders
own 70% of the company. In December 2007, the company listed its
shares on the Saudi Stock Exchange (Tadawul All Share Index) under the
symbol 4300. As of 31 December 2008, Dar Al-Arkan had total assets of
SR20.1 billion (US$5.3 billion), with shareholders’ equity of SR11.7 billion
(US$3.1 billion). Total revenues and net income reached SR5.6 billion
(US$1.5 billion) and SR2.3 billion (US$628 million), respectively. In
addition to its head office in Riyadh, Dar Al-Arkan has offices and
branches across KSA, including Mecca, Jeddah and Madinah. In total, Dar
Al-Arkan has seven branches and employs a staff of 450.

37
Saudi Binladin Group :
Overview :
The SBG was founded in 1931 by Sheikh Mohammed bin Laden
Sayyid (father of Osama bin Laden) whose relationship with the
country's founder, Abdel Aziz al Saud, led to important government
contracts such as refurbishing the mosques at Mecca and Medina.
In 1964, Mohammed bin Laden was commissioned to work on the
third Holy sanctuary of Islam, recladding the Dome of the Rock in
Jerusalem. After the death of Sheikh Mohammed in 1967, the group was
headed by Mohammed Bahareth, brother of Mohammed's first wife and
uncle of his oldest children. In 1972, Salem bin Laden, the eldest son of
Mohammed bin Laden, took over as his father's successor, with the
assistance of several brothers. Upon Salem's death in a plane crash in
1988, the leadership of the group passed to one of Salem's brothers,
Bakr, the current chairman, along with thirteen other brothers who
make up the board of the bin Laden group, the most important of these
being Hassan, Yeslam and Yehia. By 2002, the company had 35,000
employees worldwide.
Current activities :
The bin Laden group is represented in most Saudi cities — Riyadh,
Dammam — and in a number of capital cities in the region (Beirut, Cairo,
Amman, Dubai). According to a synopsis by the PBS news program
Frontline: in Egypt the SBG is headed by Omar bin Laden as Chairman,
Khaled bin Laden as CEO , Tarek Helmy as General Manager , and
represents that country's largest foreign-owned private equity group,
with over 40,000 employees. In Lebanon the SBG, represented by Yehia
bin Laden, has been holding negotiations with the local authorities for a
$50 million share in the project to rebuild the Beirut Central District
within the framework of the Solider Project and in conjunction with the
al Baraka Group and the bin Mahfouz Group. In London the SBG set up a
representative firm called Bine xport in November 1990. On 20

38
December 2005, the government of Saudi Arabia awarded a consortium
of Saudi and Emirati companies, including the Saudi Binladin Group, a
$26.6 billion contract to build King Abdullah Economic City. The Group is
constructing Abraj Al Bait Towers in Mecca and has been contracted by
Kingdom Holding Company to build the Jeddah Tower.
On 11 September 2015, while doing construction work in the
Grand Mosque in Mecca, Saudi Arabia, one of the Group's cranes
collapsed due to high winds causing 118 deaths and almost 400 injuries.
As a result, the Saudi king suspended bin Laden’s family construction
firm and banned the firm from taking new projects while having its
current projects reviewed.

39
Chapter 5
Profile of Banks Offering House Loan
Saudi Arabia’s new mortgage law will transform home financing in
Saudi Arabia to property-secured lending from the current practice of
extending loans based on salary assignment, or banks’ automatic
deductions from borrowers’ salaries to repay home loans, says a leading
rating agency.
Saudi banks have also spotted a good opportunity in home
financing as a means to sustain the current lending revival to retail
customers, says a report from Standard & Poor’s titled “How will Saudi
Arabia’s new mortgage law affect domestic banks?“
The agency believes that domestic banks are likely to expand their
mortgage lending activity significantly over time, strengthening their
competitive advantage versus nonfinancial companies and foreign banks
operating in Saudi Arabia.
“We think domestic commercial banks would capture most of the
potential growth in mortgage lending, much as they did when the
regulator reorganized the investment banking sector in 2007. For
instance, Arab National Bank already operates under the
parent/subsidiary model prevalent in the domestic investment banking
sector via its affiliate Saudi Home Loans,” Standard & Poor’s Ratings
Services added. It says the new mortgage law is important for Saudi
Arabia because it will increase individuals’ access to home financing,
“which is positive in our view owing to the country’s widening housing
gap and increasing social needs, given the lack of affordable housing in
the middle-income segment.”
S&P added: “We understand that the government has already
earmarked $ 67 billion to finance this program from the 2011 fiscal
surplus.” It also points out that Saudi banks have traditionally offered

40
home-buying loans, and not mortgages, because home-buying loans are
not fully secured by the properties being acquired but instead primarily
secured by banks’ automatic deduction of loan repayments from
borrowers’ salaries. The report said that conditions for home financing
had changed recently and Saudi banks’ Pillar III disclosures under Basel II
show a clear accelerating pattern in term of residential housing loan
booking. The Real Estate Development Fund’s (REDF) standing as the
largest provider of home financing seems therefore increasingly
contested, it says. According to the Saudi Arabian Monetary Agency
(SAMA), the report said retail real estate financing stood at about 18
percent of consumer financing as of June 30, 2012, versus 8 percent in
2008. In particular, S&P says the newest and smallest banks were very
active in home financing segments as early as 2010, rapidly gaining
market share over traditional players. The REDF, a specialized
government-owned entity — has historically been the primary home-
finance provider. In its September 2011 Article IV publication, the IMF
puts the REDF market share at about 80 percent of outstanding Saudi
home financing in 2011. The IMF further indicates that REDF is
struggling to keep up with demand, resulting in a waiting list well over
15 years, and to monitor the quality of lending, of which it reports half
as delinquent. Saudi authorities, in the run up to the implementation of
new mortgage laws, boosted REDF’s capital by $ 11 billion in March
2011, aiming to increase the availability of housing loans. The
government has also transferred REDF to the Ministry of Housing, which
was upgraded from its former status of General Housing Authority, with
a budget of SR 15 billion, the report pointed out.
According to SAMA, the report said retail real estate financing
stood at about 18 percent of consumer financing as of June 30, 2012,
versus 8 percent in 2008. In particular, the newest and smallest banks
were very active in home financing segments as early as 2010, rapidly
gaining market share over traditional players. S&P added: “We expect
banks to further develop their organizational structures to not only fully
include mortgages, and also the associated insurance products.
Domestic banks have sufficient balance sheet power, in our view, and
already have sufficient physical coverage of Saudi Arabia. This would be

41
difficult to replicate for most privately-held finance companies, and
certainly for the handful nondomestic bank branches allowed to operate
under domestic regulation.
Lastly, domestic banks are already familiar with Shariah-compliant
finance-lease lending as outlined in the new mortgage law package.”
The agency describes SAMA as an effective, thoughtful, and
hands-on regulator. Positively, the Saudi authorities have also planned
for state loan providers resembling Fannie Mae and Freddie Mac in the
US, currently designated as the Saudi Real Estate Refinancing
Corporation, to provide liquidity and stability to the fledgling mortgage
market. We understand this entity will be able to issue mortgage-backed
securities, notably to avoid any funding issues stemming from the
expected strong growth in mortgage lending over the longer term,” said
the report.
It points out that the draft legislation prescribes strict approval
chains, standardized contracts, and mandatory reporting on mortgage
borrowers. We consider these steps as positive developments, especially
because authorities have laid the foundation for the creation of a
centralized database, along the lines of that of the Saudi Credit Bureau,
which in our review has enabled consumer finance to grow according to
its potential,” S&P said. It said the new law also outlines the possibility
for the REDF to work with banks, which could further boost banks’ fee
collection, and enable a larger portion of Saudis to access home
financing.

42
Banks Offering Housing Loans :
SABB :
Home Finance is one of SABB’s Islamic Banking Solutions and is
fully compliant with Shariah principles. Renowned for its benefits and
flexibility, it is considered to be a true pioneer in home ownership
solutions. They offer a range of Home Financing products using:
Ijarah Concept where SABB owns the property and leases it to the
customer with a promise to transfer the ownership in the customer
name at the end.
Istisna’and Ijarah Mausoofa Fi-Dhimmah – SABB provide finance to
customers, who own land, to construct their house as per their taste and
design. A customer can: Own a completed Villa, Duplex, apartment or
Residential building through Ijarah concept.
Own an uncompleted house (near to completion) through Ijarah
concept. Build their own home, if you already own land through Istisna’a
and Ijarah Mausoofa Fi-Dhimah concept. Own a land through Ijarah
concept for building a home in future. Get financing against the property
you already own through Ijarah concept Features & Benefits.
Fully Shariah compliant Products.
Finance available for up to SAR 5,000,000.
Finance available up to 20 years.
Available for Government and Private employees.
Possibility of joint finance for couples & blood relatives (children,
siblings).
Exemption of repayment in case of death or permanent disability.

43
AL-AHLI Bank:
TAYSEER ALAHLI
The 'Tayseer AlAhli' Program is an Islamic product whereby NCB
offers financing to customers for the purchase of commodities (which
are owned by NCB) to be paid back in installments. Investing in Local
Commodities.
NCB selects local commodities (such as rice and barley) that are
traded daily on the Saudi Market. This makes it easy for customers to
resell what they have already bought with a small difference between
the price of purchase from the bank & the price of selling to the market.
FEATURES & BENEFITS
Fulfill Your Dreams
Tayseer AlAhli offers:
Sharia Compliance.
Instant Approval.
Payment programs with easy installments for up to 5 years.
Deferred installments during the holy month of Ramadan.
Insurance in case of death or disability.
Repayment period up to 60 months.
REQUIREMENTS
Customers must be employed by a company allowing NCB salary
transfers through 'SARIE'
Customers must have a monthly salary of at least SR 2000 net (for
Saudis) and at least SR 3000 net (for non-Saudis) .
Customers need to have been employed for at least 1 month (for
Saudis), at least one year (for non-Saudis) and at least 3 months (for
Aramco).

44
Saudi applicants must be between 18-60 years old in order to
apply, please note that applicants may not be over 60 years old as of the
date of their last installment.
Non Saudi applicant must be between 22-60 years old to apply,
please note that applicants may not be over 60 years old as of the date
of their last installment.
Management fees 1% of the amount of financing and not
exceeding SAR 5000
REQUIRED DOCUMENTS & ACTIONS:
Completed Application Form
A copy of your ID card or Iqama
A letter from your employer that includes: job type and date of
employment
A monthly salary certificate and proof of NCB salary transfers
through 'SARIE
1. Application Phase:
Provide the required documents
Specifying the details of the finance (finance amount, tenure, profit
margin, monthly installment)
Sign the application form
Obtain immediate approval
Sign the contract
2. Application execution & Commodity ownership phase:
Firstly you will receive SMS approval
The SMS will contain the name & phone number of the broker
Then you must decide to either sell or collect your commodities

45
3. Call the broker:
Call the broker using the number supplied.
Use your 8 digit NCB account number and your 4 digit pin number
to identify yourself.
Choose one of the following:
Sell the commodity and deposit the proceeds into your account or,
Collect the Commodity directly from the broker
AL-RAJHI Bank :
Personal Finance
We are proud to offer you fully Sharia’a compliant personal
finance in less than 30 minutes! Yes, 30 minutes is all it will take to
provide you with the means to renovate your home, prepare your dream
wedding, ensure your children’s education, or simply deal with those
troublesome and unexpected expenses.
Also, if you wish to get a direct response, please fill this easy online
form and our representatives will get back to you.
Saudi and Non Saudi
Financial illustration as an example only, for your information:
Finance Amount :SR 50,000
Term Cost:3.12%*
Tenure:60 months
Monthly Installment SR 900
Management Fee SR 500
Tadawul Transfer Fee SR 70

46
Tadawul Purchase Fee (0.0012) SR 60
Annual Percentage Rate (APR) 3.68%*
Minimum employment period of 1 month and goes up to 12
months depending on the employer
Salary should be transferred to Al Rajhi Bank
Minimum monthly salary starting from SR 2,000 depending on the
employer
Age should not exceed 60 years when you settle your last
installment (assuming retirement age is 60 years)
Employer must be approved by Al Rajhi Bank
Required Documents
Completed application form for Personal Finance
Valid copy of National ID
Salary Certificate
Salary transfer letter

47
Housing Schemes In Saudi Arabia :
Saudi Arabia's government has launched a new scheme to provide
housing aid to its citizens, in the hope of ending a shortage of homes
which has depressed living standards and is politically sensitive for the
government. After social discontent prompted uprisings elsewhere in
the Arab world in 2011, King Abdullah announced a plan to build
500,000 homes in Saudi Arabia over several years. Some $67 billion of
state funds were earmarked for the plan. But the programmer has been
slow to get underway because of sluggish bureaucracies, difficulties in
obtaining suitable land and the complexity of allocating aid. The new
scheme, named ESKAN - the Arabic word for housing - and launched by
the Ministry of Housing last week, aims to break through those
bottlenecks. Saudi families seeking assistance, in the form of state-
subsidized home loans or subsidized sales of land or housing units, are
being given two months to register on a website. The applications will be
considered for three months and the ministry will then announce who is
eligible for aid. Housing minister Shuwaish Al Duwaihi was quoted by
local newspapers as saying all citizens who submitted requests through
ESKAN and met the conditions would be allocated homes within seven
months. Khaled al Rubaish, a real estate analyst, said the new scheme
could help to ease the housing problem by creating a clear, universally
applicable mechanism for Saudi families to obtain aid. "The situation will
become clearer for the private sector, real estate developers and
financiers, whether banks or mortgage firms. All of these will now know
their targets," he said. John Sfakianakis, chief investment strategist at
Saudi investment firm MASIC, said: "Any step towards finding a solution
to the housing challenge is good and very much welcome...It turned out
that building 500,000 housing units was more difficult than it seemed, so
we need to pick up the pace." He added that ESKAN would "help initiate
a housing market take-off to tackle the needs of the middle class, where
most of the demand lies. Once people see the supply being addressed,
there will be fewer concerns about systemic risks and housing market
imbalance."

48
Analysts estimate that about 60 percent of Saudi families among
the country's population of about 20 million citizens do not own their
own homes, a high ratio for a wealthy country. Rising rents have made it
difficult for even middle class people to afford housing; many Saudis do
not meet qualifications for housing loans from banks. It is not clear
whether the Ministry of Housing will be able to stick to its timetable for
approving ESKAN applications, and how long actual construction of
homes will take. It may be hard to verify that applications are genuine,
which could delay the handover of homes, said Abdulwahab Abu
Dahesh, a Saudi economist. Nevertheless, the detailed conditions of the
ESKAN scheme suggest the ministry wants to avoid bureaucratic delays
by creating a straightforward, transparent system for allocating aid, and
this could be a step forward from past programmers.
Applicants must not own a house and have not received aid from a
state-subsidized housing programmer in the past; applications will be
given priority through a points system which takes into account factors
such as family size, monthly income and age, and favors the most needy
people. Applicants will pay for their subsidized homes or land, or pay off
their loans, in monthly instalments over 10 years through a 25 percent
deduction of their monthly income.

49
Chapter 5
Analysis and Findings
The marital status of the house loan owner:
Bachelor Married
The family members of house loans borrower :
2 members 4 members 6 members 7members
More than 7
38%
62%
Marital Status
Bachelor
Married
19%
24%
24%
19%
14%
The family members of house loans borrower:
2 Members
4 Members
6 Members
7 Members
More than 7
38% 62%
19% 24% 24% 19%
14%

50
Income level of house loans borrower :
SAR 5,000-SAR10,000 SAR 11,000-15,000
SAR 16,000-SAR20,000 SAR 21,000-SAR 25,000
More than SAR 25,000
The occupation of house loan borrower :
Business Govt.emolyed
Private Employed Self Employed other
29%
48%
23%
Income level of house loans borrower
SAR 5,000-10,000
SAR 11,000-15,000
SAR 16,000-20,000
SAR 21,000-25,000
More than 25,000
28%
47%
19%
5%
The occupation of house loan borrower
Business
Govt.employed
Private Employed
Self Employed
Other
29%
023%
48%
47%28%
19%
0

51
Amount of savings of house loan borrower :
SAR 3,000-SAR 5,000 SAR 6,000-SAR8,000
SAR9,000-SAR 11,000 SAR 12,000-14,000
Sources of information regarding loan facilities available for house loan
borrower :
Newspaper Television Banners Friends
other
62%14%
24%
0 0
Amount of savings of house loan borrower
SAR 3,000-5,000
SAR 6,000-8,000
SAR 9,000-11,000
SAR 12,000-14,000
47%
43%
0%
10%
0%
Sources of information regarding loan
facilities available for house loan borrower
Newspaper
Television
Banners
Friends
Other
62% 14%
24% 0
0
47% 43% 0% 10%
0%

52
Are there any pervious borrowings ( loans ) :
Yes No
Key factors influencing house loan borrower in deciding the mode or
model of financing :
Religious Rules Interest Rate Market sentiment
Govt./Pvt. Institution Other
57%
43%
Are there any pervious borrowings ( loans )
Yes
No
33%
43%
0%
24%
0%
Key factors influencing house loan borrower
in deciding the mode or model of financing
Religious Rules
Interest Rate
Market sentiment
Govt./Pvt. Institution
Other
57% 43%
33% 43% 0%
24% 0%

53
The present of cost of the affordable house in the market is reasonable
:
Highly Agree Agree Neutral Disagree
Highly Disagree
Loan amount is used for the purpose …….. by the house loan borrower
:
Land Purchase House construction Home
Modification
Personal Use Other
10%
28%
43%
19%
0%
The present of cost of the affordable house
in the market is reasonable
Highly Agree
Agree
Neutral
Disagree
Highly Disagree
43%
38%
14%
5% 0%
Loan amount is used for the purpose …….. by the
house loan borrower
Land Purchase
House Construction
Home Modification
Personal Use
Other
10%
0%
19%43%28%
14%
0%
5%
38%43%

54
Extremely strict procedures are followed by the banks & financial
institution in-case of home loan default :
Highly Disagree
Overall grading of home loan schemes are beneficial to the loaner :
Highly Disagree
19%
24%
47%
0%
10%
Extremely strict procedures are followed by
the banks & financial institution in-case of
home loan default
Highly Agree
Agree
Neutral
Disagrre
Highly Disagree
14%
43%
14%
24%
5%
Overall grading of home loan schemes are
beneficial to the loaner
Highly Agree
Agree
Neutral
Disagrre
10%
0%47%24%19%
5%
24%14%43%14%

55
The Duration for payment of home loan is keeping the borrowers
happy :
Highly Disagree
The procedures formalities for availing the loan are simple :
Highly Disagree
9%
29%
33%
29%
0%
The Duration for payment of home loan is
keeping the borrowers happy
Highly Agree
Agree
Neutral
Disagrre
Highly Disagree
19%
24%
38%
14%
5%
The procedures formalities for availing the
loan are simple
Highly Agree
Agree
Neutral
Disagrre
Highly Disagree
9% 29%33%29%
0%
19%
5%
24% 38% 14%

56
Time taken for proceduers of loan is very long by Housing finance
institution :
Highly Disagree
Repayment schedule should be in installment of :
Half Yearly Quarterly Monthly Fortnightly
Other
9%
33%
38%
14%
5%
Time taken for proceduers of loan is very
long by Housing finance institution
Highly Agree
Agree
Neutral
Disagrre
Highly Disagree
14%
33%
33%
6% 14%
Repayment schedule should be in installment
of
Half Yearly
Quarterly
Monthly
Fortnightly
Other
5%
14%38%33%9%
14%
6%33%33%14%

57
The existing regulations and government policies encourage availing
and repayment of home loans :
Highly Disagree
Overall approach of the financial institution providing home loans is
stimulating real estate activity :
Highly Disagree
10%
14%
33%
24%
19%
The existing regulations and government
policies encourage availing and repayment of
home loans
Highly Agree
Agree
Neutral
Disagrre
Highly Disagree
0%
38%
33%
28%
0%
Overall approach of the financial institution
providing home loans is stimulating real
estate activity
Highly Agree
Agree
Neutral
Disagrre
19%
33% 24%14%10%
0%
28%33%38%0%

58
The present foreclosure measures are not restricting the overall
development of the housing sector :
Highly Disagree
Metropolitan cities like Riyadh , Jeddah and Dammam should be given
more focus house loan disbursement :
Highly Disagree
0%
29%
33%
24%
14%
The present foreclosure measures are not
restricting the overall development of the
housing sector
Highly Agree
Agree
Neutral
Disagrre
Highly Disagree
0%
19%
33%29%
19%
Metropolitan cities like Riyadh , Jeddah and
Dammam should be given more focus house
loan disbursement
Highly Agree
Agree
Neutral
Disagrre
Highly Disagree
14%
24%33%29%0%
19%
29%33%19%0%

59
The level of pre-requisites for availing a house loan are not difficult :
Highly Disagree
Graduation should be the minimum education level for eligibility for a
house loan borrower :
Highly Disagree
24%
14%
24%
9%
29%
The level of pre-requisites for availing a
house loan are not difficult
Highly Agree
Agree
Neutral
Disagrre
Highly Disagree
19%
38%
24%
9%
10%
Graduation should be the minimum
education level for eligibility for a house loan
borrower
Highly Agree
Agree
Neutral
Disagrre
Highly Disagree
14%
29%
24% 9%24%
10%
9%24%38%19%

60
Interest based loan is preferred by the house loan borrower :
Highly Disagree
Non interest based loan is preferred by the house loan borrower :
Highly Disagree
14%
29%
38%
19%
0%
Interest based loan is preferred by the house
loan borrower
Highly Agree
Agree
Neutral
Disagrre
Highly Disagree
24%
14%
24%
9%
29%
Non interest based loan is preferred by the
house loan borrower
Highly Agree
Agree
Neutral
Disagrre
Highly Disagree
0%
19&38%29%14%
29%
9%24%14%24%

61
There are good number of housing finance companies in the market :
Highly Disagree
What is the key factor in deciding about the model of home loan
financing:
Profit Risking Brand Image Number of Customer
Customer Satisfaction Other
19%
14%
34%
19%
14%
There are good number of housing finance
companies in the market
Highly Agree
Agree
Neutral
Disagrre
Highly Disagree
19%
14%
29%
24%
14%
What is the key factor in deciding about the
model of home loan financing
Profit
Risking Brand Image
Number of Customer
Customer Satisfaction
Other
14%
19%34%14%19%
14%24%
29%14%19%

62
Repayment installment schedule should be :
Half Yearly Quarterly Monthly Fortnight
Other
Regulators and governments policies (streamlining) are helpful in
offering home loans :
Highly Disagree
19%
19%
33%
9%
19%
Repayment installment schedule should be
Half Yearly
Quarterly
Monthly
Fortnighty
Other
19%
33%29%
14%
9%
Regulators and governments policies
(streamlining) are helpful in offering home
loans
Highly Agree
Agree
Neutral
Disagrre
Highly Disagree
19%
9%33%19%19%
9%
29% 14%33%19%

63
Level of the interest rate charged for home loans is low :
Highly Disagree
The mechanism of housing facilitation system is cumbersome :
Highly Disagree
19%
14%
33%
24%
9%
Level of the interest rate charged for home
loans is low
Highly Agree
Agree
Neutral
Disagrre
Highly Disagree
19%
19%
24%
24%
14%
The mechanism of housing facilitation
system is cumbersome
Highly Agree
Agree
Neutral
Disagrre
Highly Disagree
9%
24%33%14%19%
14%
24%24%19%19%

64
Strong measure like developed or sell should be taken to developed
the undeveloped land :
Highly Disagree
There is sound and professional planning in financing of housing
projects :
Highly Disagree
9%
14%
24%33%
19%
Strong measure like developed or sell should
be taken to developed the undeveloped land
Highly Agree
Agree
Neutral
Disagrre
Highly Disagree
14%
29%
38%
14%
5%
There is sound and professional planning in
financing of housing projects
Highly Agree
Agree
Neutral
Disagrre
Highly Disagree
24%
19%
33%14%9%
14%29% 38%
5%
14%

65
The land prices prevailing in the market are good for development of
real estate industry :
Highly Disagree
Housing projects auctioning system follows fair procedures as per loan
borrower :
Highly Disagree
9%
24%
29%
19%
19% Highly Agree
Agree
Neutral
Disagree
Highly Disagree
14%
19%
33%
24%
9%
Housing projects auctioning system follows
fair procedures as per loan borrower
Highly Agree
Agree
Neutral
Disagree
Highly Disagree
19%
19%29%24%9%
9%
24%33%19%14%

66
Financing smart cities with good to Waster/Sanitation/Telecom/Energy
infrastructure is:
Highly Disagree
Most of the real estate projects are completed in time :
Highly Disagree
9%
24%
43%
5%
19%
Financing smart cities with good to
Waster/Sanitation/Telecom/Energy
infrastructure is
Highly Agree
Agree
Neutral
Disagree
Highly Disagree
14%
24%
33%
24%
5%
Most of the real estate projects are
completed in time
Highly Agree
Agree
Neutral
Disagree
Highly Disagree
19%
5%43%24%9%
5%
24%33%24%14%

67
The stability and growth of real estate sector is crucial for overall
development of national economy :
Highly Disagree
Expatriate involvement (like in Dubai) is critical for the growth of real
estate sector in KSA :
Highly Disagree
5%
25%
47%
9%
14%
The stability and growth of real estate sector is crucial for
overall development of national economy
Highly Agree
Agree
Neutral
Disagree
Highly Disagree
5%
24%
19%
52%
0%
Expatriate involvement (like in Dubai) is critical for the
growth of real estate sector in KSA
Highly Agree
Agree
Neutral
Disagree
Highly Disagree
14%
9%47%25%5%
0%
52%19%24%5%

68
Real estate development fund is performing at its best in development
of real estate sector :
Highly Disagree
Starting of real estate sector development index will work as " key
performance indicator " for the sector :
Highly Disagree
14%
19%
33%
24%
9%
Real estate development fund is performing at its best in
development of real estate sector
Highly Agree
Agree
Neutral
Disagree
Highly Disagree
19%
14%
33%
19%
14%
Starting of real estate sector development index will work
as " key performance indicator " for the sector
Highly Agree
Agree
Neutral
Disagree
Highly Disagree
9%
24%33%19%14%
33%
14%
19% 14% 19%

69
In order for drastic development of real estate sector in KSA the
housing finance model of other countries also need to be taken into
consideration:
Highly Disagree
The resale value of the properties is encouraging for the investors to
invest in the real estate sector :
Highly Disagree
19%
14%
19%
33%
14%
In order for drastic development of real estate sector in KSA
the housing finance model of other countries also need to
be taken into consideration
Highly Agree
Agree
Neutral
Disagree
Highly Disagree
24%
19%
24%
19%
14%
The resale value of the properties is encouraging for the
investors to invest in the real estate sector
Highly Agree
Agree
Neutral
Disagree
Highly Disagree
14%
33%19%14%19%
14%
19%24%19%24%

70
There is more focus on luxury housing in real estate sector :
Highly Disagree
Public Private Partnership ( PPP ) model would create a good and
successful real estate sector :
Highly Disagree
9%
29%
29%
19%
14%
There is more focus on luxury housing in real estate sector
Highly Agree
Agree
Neutral
Disagree
Highly Disagree
9%
24%
19%
14%
9%
Public Private Partnership ( PPP ) model would create a
good and successful real estate sector
Highly Agree
Agree
Neutral
Disagree
Highly Disagree
29%
14%
29% 19%9%
9%
14%19%24%9%

71
New taxes like transportation tax or fuel tax or additional vechicle tax
implemented in U.S and European countries like France to finance
smart cities would also be a good option in KSA also :
Highly Disagree
Developing 2 tier cities ( Towns into small cities ) would help in the
development of the real estate sector :
Highly Disagree
29%
19%24%
14%
14%
New taxes like transportation tax or fuel tax or additional
vechicle tax implemented in U.S and European countries
like France to finance smart cities would also be a good
option in KSA also
Highly Agree
Agree
Neutral
Disagree
Highly Disagree
24%
14%
33%
9%
19%
Developing 2 tier cities ( Towns into small cities ) would
help in the development of the real estate sector
Highly Agree
Agree
Neutral
Disagree
Highly Disagree
14%
14%24%19%29%
33%14%
19%
9%24%

72
Establishment of national housing banks and cooperative societies to --
finance housing is a good initiative :
Highly Disagree
Funding house loans through Islamic mortgage based finance models
will be a welcome step in development of the real estate sector :
Highly Disagree
19%
24%
33%
9%
14%
Establishment of national housing banks and cooperative
societies to finance housing is a good initiative
Highly Agree
Agree
Neutral
Disagree
Highly Disagree
14%
29%
24%
19%
14%
Funding house loans through Islamic mortgage based
finance models will be a welcome step in development of
the real estate sector
Highly Agree
Agree
Neutral
Disagree
Highly Disagree
14%
9%33%24%19%
14%
19%24%29%14%

73
High growth in FDI in real estate will increase the capacity buildings
unit homes in KSA :
Highly Disagree
14%
33%
24%
19%
9%
High growth in FDI in real estate will increase the capacity
buildings unit homes in KSA
Highly Agree
Agree
Neutral
Disagree
Highly Disagree
19%
9%
33% 24%14%

74
Conclusion
1-As per the analysis the respondents are 38% Bachelor and 62%
Married.
2- As per the analysis the family members of the house loan borrower
4-members – 24%
6- members – 19%
3-As per the analysis income level of house loan borrower , 48% were in
range SAR 11,000-SAR15,000 , were in range SAR 5,000-SAR10,000 is
28%.
4-As per the analysis the occupation of house loan borrower were 48%
in the Govt. Employed ,and 28% in Business section.
5-As per the analysis the amount of savings of house loan borrower ,
62% in range SAR3,000-SAR 5,000 , were in range SAR 9,000- SAR 11,000
is 24% , and in the range SAR 6,000 –SAR 8,000 is 14%.
6-As per the analysis the source of information regarding loan facilities
available for house loan borrower are 47% from the Newspaper , 43%
from the Television , and 10% from the Friends / Relatives.
7-As per the analysis are there any pervious borrowings ( loans ) , 57%
said ( Yes ) , and 43% said ( No ).

75
8-As per the analysis the Key factors influencing house loan borrower in
deciding the mode or model of financing , were 43% in Interest Rate ,
33% in Religious Rule , and 24% in Govt./PVT. Institution.
9-As per the analysis the present of cost of the affordable house in the
market is reasonable are 43% Neutral , and 29% Agree.
10-As per the analysis the Loan amount is used for the purpose …….. by
the house loan are 42.85% for Land Purchase , 38.09% for House
Construction , 14.28% for Home Modification , and 4.76 for Personal
Use.
11-As per the analysis the Extremely strict procedures are followed by
the banks & financial institution in-case of home loan default are 47%
Neutral , and 24% are Agree.
12-As per the analysis the Overall grading of home loan schemes are
beneficial to the loaner are 42.85% Agree , and 23.80% are Disagree.
13- As per the analysis the Duration for payment of home loan is keeping
the borrowers happy are 33.33% Neutral , both agree and disagree have
the same percentage 28.57%.
14-As per the analysis the procedures formalities for availing the loan
are simple are 38.09% Neutral , and 23.8% Agree.

76
15-As per the analysis the time taken for procedures of loan is very long
by Housing finance institution are 38.09% Neutral , and 33.33 Agree.
16-As per the analysis the repayment schedule should be in installment
were 33.33% in Quarterly , 33.33% Monthly , and 14.28% Half Yearly.
17-As per the analysis the existing regulations and government policies
encourage availing and repayment of home loans are 33% Neutral , and
24% Disagree.
18-As per the analysis overall approach of the financial institution
providing home loans is stimulating real estate activity are 38.09%
Agree, 33.33% Neutral , and 23.8% Disagree.
19-As per the analysis the present foreclosure measures are not
restricting the overall development of the housing sector are 33.33%
Neutral , 28.57% Agree , and 23.8% Disagree.
20-As per the analysis Metropolitan cities like Riyadh , Jeddah and
Dammam should be given more focus house loan disbursement are 33%
Neutral ,and 29% Disagree.
21-As per the analysis the level of pre-requisites for availing a house loan
are not difficult are 28% Disagree , 24% are both Neutral and Agree.
22-As per the analysis the graduation should be the minimum education
level for eligibility for a house loan borrower are 38% Agree , 24%
Neutral.

77
23-As per the analysis the interest based loan is preferred by the house
loan borrower are 38% Neutral , 28% Agree , and 19% Disagree.
24-As per the analysis the non interest based loan is preferred by the
house loan borrower having equal percentage 24% for Highly Agree ,
Neutral , and Disagree.
25-As per the analysis there are good number of housing finance
companies in the market are 33%Neutral , and 19% for both Highly
agree and Disagree.
26-As per the analysis the key factor in deciding about the model of
home loan financing are 29% they thought for the Number of customer ,
and 23% they believe it's from the Customer Satisfaction.
27-As per the analysis the Repayment installment schedule they think
should be 33% repay in Monthly basis , and 19% should be in Quarterly
Basis.
28-As per the analysis the regulators and governments policies
(streamlining) are helpful in offering home loans are 33% Agree , 24%
Neutral , and 19% Highly Agree.
29-As per the analysis the level of the interest rate charged for home
loans is low , 33% they see its Neutral , 24% they Disagree , and 19% are
Highly Agree.

78
30-As per the analysis the mechanism of housing facilitation system is
cumbersome , 24% are Neutral , 24% also Disagree , were 19% for both
Highly Agree and Agree.
31-As per the analysis the strong measure like developed or sell should
be taken to developed the undeveloped land are , 33% are Disagree,
were 24% are Neutral.
32-As per the analysis there is sound and professional planning in
financing of housing projects , there are a lot see it as Neutral 38% , and
29% they Agree.
33-As per the analysis the land prices prevailing in the market are good
for development of real estate industry are , 28% Neutral , 24% Agree ,
and 19 % for both Disagree and Highly Disagree.
34-As per the analysis the housing projects auctioning system follows
fair procedures as per loan borrower are 33% Neutral , 24% Disagree ,
and 19% are Agree.
35-As per the analysis the financing smart cities with good to
Waster/Sanitation/Telecom/Energy infrastructure are 43% Neutral , 24%
Agree , and 19% are Highly Disagree.
36-As per the analysis the most of the real estate projects are completed
in time they thinking the 33% are Neutral , 24% are Agree , and also 24%
are Disagree.

79
37-As per the analysis the stability and growth of real estate sector is
crucial for overall development of national economy they thought , 47%
are Neutral , and 24% are Agree.
38-As per the analysis the expatriate involvement (like in Dubai) is
critical for the growth of real estate sector in KSA they believe the 52%
are Disagree , 24% are Agree , and 19% are Neutral.
39-As per the analysis the real estate development fund is performing at
its best in development of real estate sector are 33% Neutral , 24% are
Disagree , and 19% are Agree.
40-As per the analysis the starting of real estate sector development
index will work as " key performance indicator " for the sector are 33%
Neutral , and 19% for both Highly Agree and Disagree.
41-As per the analysis the In order for drastic development of real estate
sector in KSA the housing finance model of other countries also need to
be taken into consideration are 33% they Disagree , 19% are Neutral ,
and 19% they are Agree.
42-As per the analysis the resale value of the properties is encouraging
for the investors to invest in the real estate sector are 24% Neutral , also
24% Highly Agree , and 19% are both Agree and Disagree.
43-As per the analysis there is more focus on luxury housing in real
estate sector , 29% they said its Neutral , also 29% they Agree , and 19 %
they Disagree.

80
44-As per the analysis the public Private Partnership ( PPP ) model would
create a good and successful real estate sector are 43% Neutral , 24%
Agree , and 19% Highly Agree.
45-As per the analysis the new taxes like transportation tax or fuel tax or
additional vehicle tax implemented in U.S and European countries like
France to finance smart cities would also be a good option in KSA also ,
38% they Disagree , 24% are Agree , and 19% Neutral.
46-As per the analysis the Developing 2 tier cities ( Towns into small
cities ) would help in the development of the real estate sector are 28%
they Highly Agree , 24% are Neutral , and 19% they Agree.
47-As per the analysis the establishment of national housing banks and
cooperative societies to --finance housing is a good initiative are 33%
Neutral , 24% they Highly Agree , and 19% Highly Disagree.
48-As per the analysis the funding house loans through Islamic mortgage
based finance models will be a welcome step in development of the real
estate are 33% Neutral , 24% they Agree , and 19% they Highly Agree.
49-As per the analysis the high growth in FDI in real estate will increase
the capacity buildings unit homes in KSA are 33% Agree , 24% are
Neutral , and 19% they Disagree.

81
Appendix
Affordable Housing - KSA Citizens Questionnaire
1. The marital status of house loan borrower:
1 Bachelor 2 Married
2. The family members of house loan borrower:
1. 2 members 2. 4 members 3. 6 members 4. 7 members 5.
More than 7
3. Income level of house loan borrower:
1. SAR 5,000 - SAR10,000 2. SAR 11,000 – 15,000 3. SAR 16,000-
SAR20,000 4. SAR 21,000- SAR 25,000Ө 5. More than SAR
25,000
4. The occupation of house loan borrower:
1. Business 2. Govt. employed 3. Private Employed 4. Self Employed
5. Other
5. Amount of savings of house loan borrower:
1. SAR 3,000 - SAR 5,000 2. SAR 6,000 – 8,000 3. SAR 9,000 -
SAR 11,000 4. SAR 12,000- SAR 14,000Ө 5. More than SAR
14,000.
6. Sources of information regarding loan facilities available for house loan
borrower:
1. Newspaper 2. Television 3. Banners 4. Friends/Relatives
5. Others
7. Are there any previous borrowings (loans):
1. Yes 2. No
8. Key factors influencing house loan borrower in deciding the mode or model
of financing:
1. Religious Rules 2. Interest Rate 3. Market Sentiment 4. Govt. /
Pvt. Institutions 5. Other
9. The present cost of the affordable house in the market is reasonable:
1. Highly Agree 2. Agree 3. Neutral 4. Disagree 5.Highly
Disagree

82
10. Loan amount is used for the purpose of ____ by the house loan borrower:
1. Land purchase 2. House Construction 3. Home Modification
4. Personal Use 5. Other
11. Rank most critical difficulties faced by house loan borrower (from 1 most
important) to 5(least important ):
Ө. Tough pre-requisites to qualify for the loan
Ө. Time duration from sanction to getting loan amount
Ө. Lengthy formalities
Ө. Availability of Shariah based house financing model
Ө. Other
12. Extremely strict procedures are followed by the banks & financial institutions
in-case of home loan default:
Highly Agree 2. Agree 3. Neutral 4. Disagree 5. Highly
Disagree
13. Overall grading of home loan schemes are beneficial to the loaner:
Disagree
14. The duration for payment of home loan is keeping the borrowers happy:
Disagree
15. The Procedural formalities for availing the loan are simple:
1. Highly Agree 2. Agree 3. Neutral 4. Disagree
5. Highly Disagree
16. Time taken for processing of loan is very long by Housing Finance
institutions:
Disagree
17. Repayment schedule should be in installments of:
1. Half yearly 2. Quarterly 3. Monthly 4. Fortnightly 5. Other

83
18. The existing regulations and government policies encourage availing and
repayment of home loans:
Disagree
19. Overall approach of the financial institutions providing home loans is
stimulating real estate activity:
Disagree
20. The present foreclosure measures are not restricting the overall development
of the housing sector:
Disagree
21. Metropolitan cities like Riyadh, Jeddah and Dammam should be given more
focus house loan disbursement.
Disagree
22. Suggestions for improving the home loan schemes:

84
Affordable Housing – KSA Real Estate Stakeholder Questionnaire
1. The level of pre-requisites for availing a house loan are not difficult:
Disagree
2. Graduation should be the minimum education level for eligibility for a house
loan borrower:
Disagree
3. Interest based loan is preferred by the house loan borrower.
Disagree
4. Non interest based loan is preferred by the house loan borrower.
Disagree
5. There are good number of Housing finance companies in the market:
Disagree
6. What is the key factor in deciding about the model of home loan financing:
1. Profit 2. Risking brand image 3. Number of Customer 4. Customer
Satisfaction 5. Other
7. Repayment installment schedule should be:
1. Half yearly 2.Quarterly 3. Monthly 4. Fortnight
5. Other
8. Regulators and government policies (streamlining) are helpful in offering of
home loans:
Disagree
9. Level of the interest rate charged for home loans is low:
Disagree
10. The mechanism of Housing Facilitation System is cumbersome:

85
Disagree
11. Strong measures like develop or sell should be taken to develop the
undeveloped land:
Disagree
12. There is sound and professional planning in financing of housing projects:
Disagree
13. The land prices prevailing in the market are good for development of real
estate industry:
Disagree
14. Housing projects auctioning system follows fair procedures as per loan
borrower:
Disagree
15. Financing smart cities with good to Water/Sanitation/Telecom/Energy
infrastructure is possible:
Disagree
16. Most of the real estate projects are completed in time:
Disagree
17. The stability and growth of real estate sector is crucial for overall
development of national economy:
Disagree
18. Expatriate involvement (like in Dubai) is critical for the growth of real estate
sector in KSA:

86
Disagree
19. Real Estate Development Fund is performing at its best in development of
real estate sector:
Disagree
20. Starting of real estate sector development index will work as ‘key
performance indicator’ for the sector:
Disagree
21. In order for drastic development of real estate sector in KSA the housing
finance models of other countries also need to be taken into consideration:
Disagree
22. The resale value of the properties is encouraging for the investors to invest in
the real estate sector:
Disagree
23. There is more focus on luxury housing in real estate sector of KSA:
1. Highly Agree 2. Agree 3. Neutral 4. Disagree
5.Highly Disagree
24. Ethics are followed in marketing of real estate sector:
Disagree
25. Public Private Partnership (PPP) model would create a good and successful
real estate sector:
Disagree
26. New taxes like transport tax or fuel tax or additional vehicle tax implemented
in US and European countries like France to finance smart cities would also
be a good option in KSA also.

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