| RIYADH, March 13
RIYADH, March 13 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
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 programme 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
Saudi families seeking assistance, in the form of
state-subsidised home loans or subsidised 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
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
"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
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 programmes.
Applicants must not own a house and have not received aid
from a state-subsidised housing programme 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 favours the most needy people.
Applicants will pay for their subsidised homes or land, or
pay off their loans, in monthly instalments over 10 years
through a 25 percent deduction of their monthly income.