Real estate developers are starting to shift their gaze to Saudi Arabia, lured by huge demand for housing created by social and demographic changes. Real estate is now the fastest growing economic sector in the kingdom. Samba Financial Group estimates that through to 2010, new real estate construction activity will reach SR 484,000 million ($129,000 million) in value, with the majority in the housing segment.
Unlike the UAE, the Saudi housing market is demand-driven rather than speculative. But market dynamics show that the need for new homes is rapidly outstripping supply Riyadh alone is estimated to require 270,000 housing units. To keep pace with that demand, experts predict that the kingdom will need to build 1.5 million new homes by 2015. Demographic fundamentals are starting to bite, aggravated by the country's youthful population. More than two-thirds of Saudis are under the age of 30, but in a country with no tradition of volume house building, erecting 1.5 million new homes remains a big task.
Housing tastes are changing too, as average family sizes shrink and …