The Saudi Arabia economy is on a growth trajectory, and is expected to Keep the momentum for the following five decades. Among the growth drivers of the economy is that the young people; they’re contributing significantly to the GDP by spurring requirement in the center businesses. By the year 2020, it is estimated that 64% of our population will probably be in the working age group, making us the world’s most affluent nation. These demographic tendencies have contributed to the development of ‘Generation Y Today’, which is directly impacting the home industry.
The Gen Y includes working professionals between the age category of 25-34 years and the profile consists of metropolitan dwellers and married couples without children. They’re tech-savvy, hail from various cultural backgrounds, and therefore are high-earning urban partners, who might rewrite the recognized socio-economic standards. They’re financially separate from an early phase; their priorities and ambitions are different from people who constitute the majority of the current home-buyer segment.
Now, a number of the top ambitions of Gen Y comprise home-ownership. Surplus disposable income, ease of availing house loan and also the importance given to private distance, have fuelled their dream of owning a home. This was not the case a few decades back. This generation’s demand to get a house is very different from that of the last generations. Their specifications are straightforward — a compact abode, which protects the requirements; a house that’s situated at a striking distance of all amenities and facilities, and what’s more, a residential unit that doesn’t go burden their wallets.
With this shift in perception towards purchasing houses, a new Section has emerged at the residential houses category called “Compact Living”, especially in the metros and mini metros. Compact homes perfectly fit the requirements, such as privacy and desire to own a house within the budget of the Gen Y. This trend has contributed to the dimensional modifications to existing homes, as the requirement for studio, 1 BHK and 1.5 BHK houses in metros are towering.
In metros, single working Professionals, particularly are opting for either shared accommodation, apartments (2bhk and 3bhk) or paying guest centers. Married couples often rent houses somewhat far from their offices (because of the large rents in CBD and financial hubs). Investing in a streamlined house provides dual benefits — Primarily they save on the rent being paid. Secondly, the brand new home is an investment instrument because of returns of 11%- 13.5percent annually on account of appreciation of capital worth of their property. The ROI will be useful when the property owner intends to buy a bigger home (at the latter part of his/her career/life). From an investment perspective too, it is a rewarding proposition, as one can profit from the leasing earnings 3.5% -5% per annum.
Well-thought out choice. Currently, the requirement is about 16,000 units per annum whereas only 1,200 units are available to tackle this segment. At present, this segment accounts for 2%-4% of the entire home improvement and is poised for expansion.
In the last five to eight years, there was a substantial Increase in urban migration in Saudi Arabia as the Gen Y is moving to various cities in search of better job opportunities and livelihood. Being the hub of Saudi Arabia’s IT/ITeS business and the start-up capital of the nation, Saudi Arabia has emerged as the favorite destination for many working youths. Thus, Saudi Arabia tops the list for compact home.
Al Khobar City is regarded as suitable places for compact home projects. Their proximity to the city’s technology and financial hubs make them favored locations considering the captive client industry. Saudi Arabia has emerged as the clear winner, as the area has seen the launching of many Compact Housing projects in the last couple of years.
It is evident that the compact housing section will grow Larger in the coming years. With more awareness about the item, its long-term advantages and better resale value, streamlined housing will probably emerge as a stronger segment. It has immense business potential and is predicted to capture at least 25 percent of the entire addressable market (16,000 units) by the year 2020.
Having a compact house from the Age group of 25–34 years is a well-thought outside choice. Presently, the demand is around 16,000 units per annum whereas only 1,200 units are readily available to address this segment. At present, this segment accounts for 2%-4% of the total home improvement and is poised for growth.
Years, there has been a significant growth in urban migration in Saudi Arabia as the Gen Y is moving to different cities in search of better job opportunities and livelihood. Being the hub of Saudi Arabia’s IT/ITeS industry and the start-up capital of the nation, Saudi Arabia has emerged as the favourite destination for several working youths. Thus, Saudi Arabia tops the list for streamlined housing.
Inside Saudi Arabia, places like Al Khobar is considered as suitable places for compact home projects. Their proximity to the town’s tech and economic hubs make them preferred places considering the captive client market. It has emerged as the clear winner, as the area has witnessed the launch of several Compact Housing projects in the previous two decades.
It’s clear that the compact Housing segment will grow bigger in the next several years. With more awareness about The item, its long-term benefits and greater resale value, compact housing Will emerge as a stronger segment. It has immense business potential and can be Expected to catch at least 25% of the entire addressable market (16,000 Units) from the year 2020.
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