HOMES FOR ALL

Saudi Arabia 2018-19 | REAL ESTATE, HOUSING & MORTGAGE | INTERVIEW

NHC's major focus is supporting the Ministry of Housing to increase home ownership among Saudi citizens.

Mohammad S. Albuty
BIOGRAPHY
Mohammad S. Albuty is Advisor to the Minister of Housing and has been leading NHC since its inception in 2016. Prior to that, he was VP of Business Development at TAQNIA Services. He has an extensive career in Saudi public service. He started his career as analyst and application developer for the Ministry of Defense and Aviation. He holds a bachelor’s degree in computer science from King Saud University, a master’s in information systems and telecommunications from John Hopkins University, and a master’s in systems engineering from George Mason University.

Could you tell us more about the establishment of NHC and its mandate to engage with the private sector?

NHC is the investment arm of the Ministry of Housing as well as the executor of the ministry. Our mandate is to support the ministry to achieve its goals regarding partnerships with the private sector to increase home ownership among Saudi citizens. We also serve as executor for the ministry's initiatives, of which the most important are PPPs; however, there are several others where we will be the operator. Within five years, we aim for the ministry to be entirely self-sustainable.

How will these PPPs be structured and tendered to the market?

We are working to incentivize the private sector to develop the right number and kind of units for our citizens. We work closely with developers to study relevant data; based on that, we develop the appropriate products and price. We also work on the demand side to enable citizens to buy our products. We play a major role in simplifying developers' financial obligations. Through our subsidiaries, we are creating more services to build an ecosystem that minimizes risk to all parties. This is one of the main incentives for the private sector to get involved: minimizing risk. We work closely with developers to select the product that will be most affordable. We help develop and design the right product at the right price. We know what people here can afford, which is generally in the range of SAR250,000-750,000 (USD66,650-200,000). Our projects are countrywide, though based on our studies and data, we can see that most demand is confined to just eight large cities. We will focus our PPPs on those eight cities; however, there are other programs for smaller cities, and these are not PPPs.

Regarding home ownership, are you more involved with buyers or developers?

One of our main objectives is to enable suppliers and developers; however, we have several other initiatives that are focused on the lender and the beneficiary. We work to find the right bank for the right developer so that together they can create the right product for the right beneficiaries. We are working to build trust by matching these three aspects perfectly. A successful project is one where everyone is supported, such as providing buyers with solid loans. NHC is, therefore, an intermediary in this tripartite system of developer, lender, and beneficiary.

Does that include programs aimed at foreign investors?

We are working to bring in and accommodate foreign investors. For the next three years, we aim to provide 480,000 owned units and are in talks with international investors from Turkey, South Korea, China, and others. There is huge demand for housing here, and we seek to increase supply by any means.

What ambitions have you set for the coming years?

Over the next three years, we will put a great deal of effort into supporting the Ministry of Housing and PPPs. At the same time, we will work on initiatives that increase privatization and even create entities that will be privatized. We will incubate these companies in the next three years until they are capable of sustaining themselves. We have a plan to create six new companies, though the execution will depend on what happens in the market and if the demand changes.