Minister of Municipalities and Housing Confirms Real Estate Market Transition from Speculation to Development

Minister of Municipalities and Housing Majed Al-Hogail stated that the Kingdom's real estate market has shifted from a speculation phase to a development phase, confirming that the Real Estate Balance Program is progressing according to plan. His remarks came in an interview with Al Arabiya, reported by Argaam website.

He explained that applications for development permits have been submitted for more than 27 million square meters, indicating an expansion in urban activity. He noted that fees on undeveloped land aim to incentivize development rather than increase revenue, meaning directing owners of undeveloped land toward construction instead of holding onto it.

Regarding prices, the minister spoke of an emerging balance in the Riyadh market, as peripheral areas lacking a good level of services are seeing declines, while prices remain stable in neighborhoods with adequate services. This variation reflects the link between price and the level of services and infrastructure in each area.

This official trend reflects an effort to turn demand for land into actual projects, supporting the supply of units in the medium term. This comes as the program continues its goals aimed at achieving balance in the real estate market and narrowing the gap between supply and demand in major cities. The volume of permit applications indicates that a portion of the retained land has begun moving toward actual development.

What do these terms mean?

The Real Estate Balance Program is a government initiative aimed at balancing supply and demand in the real estate sector. Undeveloped land fees are amounts imposed on undeveloped land to encourage its construction. Speculation is buying real estate to sell it for a quick profit without carrying out development. A development permit is an approval allowing construction on the land to begin.