\nSaudi Arabia is to allow foreigners real estate investors to own property for the first time in one of four cities under construction in the country.
\nKing Abdullah Economic City will be the first freehold city in Saudi Arabia and is being built by government controlled Emaar Economic City at a cost of $27 billion with an expected completion date of 2025. It will cover an area the size of Brussels.\n<\/p>\n
\n\u2018A lot of people want to invest in the Saudi market and see it as a frontier for real estate investment because of the population explosion here,\u2019 said Fahd Al-Rasheed, chief executive officer of Emaar Economic City, a company controlled by the Saudi Arabian government and Dubai\u2019s biggest property developer.\n<\/p>\n
\nThe city, known as KAEC, is near Jeddah and designed to house two million people and generate a million jobs. The other three cities under construction are Knowledge Economic City in Medina, Jazan Economic City in Jazan and Prince Abdul Aziz bin Mousaed Economic city in Hail. Two more economic cities are planned in Tabuk and the Eastern Province.\n<\/p>\n
\nKAEC is part of a $400 billion plan announced by the government in 2008 to invest in Saudi Arabia\u2019s infrastructure and make the country less dependent on the oil industry as well as meet its population growth. Saudi Arabia\u2019s population has more than doubled since 1986 to about 25.5 million.\n<\/p>\n
\nForeign investors, individuals and companies, will be able to buy under the new Economic Cities Act issued almost two months. Regulations putting the act into effect are expected soon and will cover issues such as foreclosures, repossessions and the creation of a land registry.\n<\/p>\n
\nKAEC will have the Red Sea\u2019s biggest port and an industrial district where French oil company Total SA and US chocolate maker Mars will operate. The city will be spread over 65 square miles. \u2018Over the next five years we expect to spend more than $4 billion developing infrastructure and assets in the city. This won\u2019t be done by us alone, but with other partners,\u2019 Al-Rasheed said.\n<\/p>\n
\nAbout 40 families already live in KAEC and Emaar Economic City plans to hand over 470 houses to buyers this year in the project\u2019s first phase. The second stage, including homes for 40,000, is scheduled for completion in 2014.\n<\/p>\n
\nBut the project hasn\u2019t escaped the economic crisis. A shortage of houses has not prevented about 15% of homebuyers defaulting on purchases and the company was forced to delay construction of 16 towers as customers struggled to make payments.\n<\/p>\n
\nAl Rasheed said he\u2019s now seeing an increase in sales, mostly among middle income buyers, prompting the company to start its 22,000 unit Hawadi housing project a year earlier than planned. \u2018We are going to hit our stride with Hawadi. It\u2019s affordable and within the typical mortgage range. Anybody can invest in something like this,\u2019 he added.\n<\/p>\n
\nThe 16 delayed tower development will be started again in six months after the project is redesigned and retendered to take advantage of declining construction costs, Al Rasheed said.<\/p>\n","protected":false},"excerpt":{"rendered":"
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