Saudi Arabia will fall short of housing targets

Significance

The national housing deficit is estimated at 1.5 million homes, rising rapidly given the country's youthful demographic profile. This is an important government policy target: housing has the largest share among 25 ministries and state agencies in the public spending targets for 2016-2020, as set out in the National Transformation Programme (NTP). The National Guard on February 21 awarded a 1.3-billion-dollar contract to Italy's Salini-Impregilo to build 6,000 homes in a new housing district outside Riyadh.

Impacts

• The progress of the housing initiative will affect younger Saudis' support for Crown Prince Mohammed bin Salman, the architect of the NTP.
• With leading Saudi construction firms under financial pressure, housing investment will provide opportunities for international contractors.
• A rise in housing stock will increase residential electricity and water demand, without effective measures to maximise energy efficiency.