The funding of affordable housing in the kingdom of saudi arabia

.…………………………...………………………………………… :Theme ………………………… ……………………………………المحور:

Author/s Name/s. Research Title S.Meeran, B Sidawi. Constraints on financing of the affordable housing in KSA اسم الباحث. عنوان البحث

البحوث وأوراق العمل م2010أكتوبر 27-25هـ الموافق 1431ذو القعدة 19-17 الدمام التطوير العقاري واإلسكان المستدام: العمرانية األولي ةتنميالندوة

The 1st Built Environment Development Symposium: Real Estate and Housing Sustainability, Dammam 17-19 Zul Qaedah 1431/ 25-27 October 2010 Research papers

1

THE FUNDING OF AFFORDABLE HOUSING IN THE KINGDOM OF SAUDI ARABIA:

POTENTIAL CONSTRAINTS AND SOLUTIONS

Dr Sheik Meeran1, Dr Bhzad Sidawi2

1 Senior Lecturer in Decision Analysis, University of

Bath, UK, e-mail: [email protected]

2 Bhzad Sidawi, Assistant professor, University of

Dammam, Dammam, KSA, e-mail: [email protected]

Submission Date: 20/ 09 /2010 Paper Type (Check one): □ Scientific Paper □ Essay □ Presentation

Abstract:

The demand for affordable housing around the world and in Kingdom of Saudi Arabia has increased

in the past decades due to improvement in income levels for many, increase in expectation, requirement

for a better standard of living and the increase in population. In KSA, Islamic banks, joint-stock

companies, charities and government organizations such as Real Estate Development Fund REDF are

struggling to meet the increasing demands of the market and provide finance to the prospected home

buyers. The present financing system seems to be constrained by a number of legal, financial, socio-

economic constraints thus it seems incapable to meet the present and future financial demands by the

increasing low-income population. This paper discusses the potential constraints to the financing of

affordable housing in KSA. It investigates what banks and other financial organizations are doing to

overcome it and whether their plans to tackle the funding problem and ease the constraints are efficient.

The study recommends that banks and other financial organizations should join efforts to overcome the

problem of finance and to create legislations, mechanisms and tools that are capable to ease these

potential constraints and provide sufficient and consistent funding to the low-income clients.

Keywords:

Affordable housing, Islamic built law, owner’s rights, user lifestyle, Islamic financing, Scio-

economic factors

Biography:

Dr Sheik Meeran is a senior lecturer in Decision Analysis in the School of Management at the

University of Bath, UK. After graduating in 1979 with an Engineering Degree from Madurai university,

India, achieving an Honours class, he worked in Aeronautical industry for eight years. Then he gained

his Masters and Doctoral degrees from Cranfield Institute of Technology UK in 1989 and 1991

respectively. For the last 19 years Dr. Meeran has been working in various Universities primarily teaching

and researching in Operations and System Analysis related subjects.

Dr Sidawi was born in Damascus, Syria. He obtained his Bsc degree from Damascus University,

Faculty of Architecture and Planning. He has worked in Syria for ten years as an architect. He got his

MPhil in CAAD in 1997 from Bath University, UK and PhD in Internet information management from

Cardiff University in 2004. Dr Sidawi had worked in the UK for around 7 years as an architectural

designer and CAAD consultant. He has a number of publications in the areas of e-business, e-commerce,

architecture education, affordable housing, smart technology and electronic project management. He is

now working at King Faisal University, College of Architecture and Planning since November 2006.

.…………………………...………………………………………… :Theme ………………………… ……………………………………المحور:




2

القيود على تمويل االسكان الميسر في المملكة العربية السعوديةعنوان البحث:

2 بهزاد صيداويد. ، 1شيخ ميرانأ.د.

1 ، المملكة المتحدة، باث، جامعة باث، ، أستاذ

[email protected]البريد اإللكتروني:

2

مملكة العربية السعودية ال , دمامجامعة ال,الهندسة المعمارية كلية ,ساعدأستاذ م [email protected],البريد اإللكتروني:

مجرد □ مقالة مفيدة □ بحث علمي □ اختار نوع(:نوع التقديم: ) 2010/ 09/ 20: الورقة تاريخ إرسال*

عرض

المستخلص:

ملكة العربية السعودية خاصة قد زاد خالل العقود الماضية نتيجة إن الطلب على المساكن الميسرة في جميع أنحاء العالم وفي المللتحسن في مستويات الدخل بالنسبة للكثيرين، وزيادة في التوقعات والمتطلبات لتحسين مستوى المعيشة وزيادة في عدد السكان.

صندوق التنمية العقارية في المملكة تكافح البنوك اإلسالمية والشركات المساهمة والجمعيات الخيرية والمنظمات الحكومية مثلالعربية السعودية من أجل تلبية الطلبات المتزايدة للسوق ، وتوفير التمويل لمشتري المنازل. يبدو أن نظام التمويل الحالي مقيد

تطلبات الحاضر بعدد من المعوقات القانونية والمالية ، واالجتماعية واالقتصادية وبالتالي فإنه يبدو غير قادر على تلبية موالمستقبل المالية من العدد المتزايد من السكان ذوي الدخل المنخفض، تناقش هذه الورقة القيود المحتملة على تمويل اإلسكان الميسر في المملكة العربية السعودية. وهي تحقق في ما تفعل المصارف وغيرها من المنظمات المالية للتغلب عليها وعما إذا

عالجة مشكلة التمويل وتخفيف القيود تعتبر ناجعة. توصي الدراسة بأن تتضافر جهود البنوك وغيرها من كانت خططها لمالمنظمات المالية للتغلب على مشكلة التمويل وإيجاد التشريعات واآلليات واألدوات القادرة لتخفيف هذه القيود المحتملة، وتوفير

المنخفض. تمويل كاف وثابت ومستمر للعمالء من ذوي الدخل

الكلمات الدالة:

, أسلوب معيشة المالك, العوامل االقتصادية نظام البناء االسالمي, حقوق المالكاالسالمي, التمويل, ةالمساكن الميسر .االجتماعية

السيرة الذاتية:

حدة. تخرج في عام الدكتورشيخ ميران هو محاضر رئيسي في تحليل القرارات في كلية اإلدارة في جامعة باث ،المملكة المتبشهادة في الهندسة مع مرتبة الشرف من جامعة مادوراي ،الهند عمل في صناعة الطيران لمدة ثماني سنوات. حصل على 1979

على التوالي. عمل 1991و 1989شهادة الماجستير ثم الدكتوراه من معهد كرانفيلد للتكنولوجيا في المملكة المتحدة عامي الماضية في مختلف الجامعات في المملكة المتحدة في مجال التدريس والبحث العلمي لعمليات وأنظمة 19الدكتور ميران طوال

تحليل القرارات.

، وحصل على درجة الماجستير في 2198تخرج من كلية الهندسة جامعة دمشق في .ولد د. صيداوي في دمشق سورياعمل من جامعة كارديف بريطانيا، 2004م حصل على الدكتوراه عام من جامعة باث بريطانيا، ث7199 الهندسة المعمارية عام

7ستشاري في مجال التصميم بواسطة الحاسب في بريطانيا لمدة وا سنوات وعمل كمصمم معماري 10كمعماري في سوريا لمدة دارة االلكترونية للمشاريع التجارة اإللكترونية، المساكن الميسرة، اإل، له عدة مؤلفات في مجال األعمال اإللكترونية سنوات.

.دماميعمل حاليا كأستاذ مساعد في جامعة ال والتعليم المعماري.

.…………………………...………………………………………… :Theme ………………………… ……………………………………المحور:




3

1. INTRODUCTION

The requirement for affordable housing in the Kingdom of Saudi Arabia (KSA) has increased in the past

few decades due a number of factors which include the improvements in income levels and an increase in the

population who do not have financial resources to buy a property from the traditional market. It is assumed

that the Saudi population will reach 33.44 million by 2020 and family size will fall to 5.3 and it is estimated

that 2.32 million new housing units should be built in the Kingdom to satisfy the total requirement of

housing.. This gives a long-term average requirement for new housing units of around 145,000 annually

from 2005 through 2020 [1]. Another report from Samba (Saudi American bank) predicates that by 2020 a

total of 2.62 million housing units should be built, at an average rate of 163,750 units per annum [2]. The

Ministry of Economy and Planning's 8th Development Plan (2005-2009) showed a shortage of nearly

730000 housing units in the kingdom besides the unmet housing demand of 2.7 Million housing units by the

end of the 7th Development Plan. It is expected that the rate of requirement will also increase, to an extent

that this would be double the current requirement by 2015. In contrast, the housing affordability for both

Saudis and non Saudis is expected to decline substantially in the future due to house prices rising rather

faster than incomes. The increase in purchasing power for Saudis is approximately 25%, against a 50%

housing price rise [3]. Fewer citizens would be able to afford to buy houses in the future or to get housing

loans from banks. Aldosary et al has supported this view as he mentioned there is a mass requirement of

affordable housing within the kingdom, particularly by middle-income Saudi families [4]. He predicated that

906,876 affordable housing units are needed by 2025. This is based on the forecasted estimation of the total

population as 39,581,511(i.e. 39.5 million). The real estate market is undersupplied in the category of

affordable low and middle-income housing and it is expected that the situation will remain the same case in

the future. This is perpetuated by the lack of affordability of most low and medium income families to

acquire a dwelling through loans which stifles the required finance for the private sector development of

housing. Currently, the financing of affordable housing in the KSA is provided by a number of government

bodies, financial organizations including banks and private sector companies on a limited scale. The present

research suggests that financial organizations are constrained by a number of barriers, including those

mentioned above, that limit their ability to provide the finance to meet the present and future requirements of

the populace, develop a feasible strategy and create flexible lending mechanisms to tackle the problem.

These constraints will be discussed in detail in the following sections.

2. BACKGROUND TO ISLAMIC FINANCE IN KSA

Islamic law (or Shari’ah) sets rules for Islamic finance [5]. The main principles of Islamic finance are as

follows (i) the prohibition of taking or receiving interest (ii) capital must be used in ventures which have

social and ethical purpose not just as a means to a source of continuous return, irrespective of whether the

money is invested in a profit acquiring venture or not (iii) prohibition of investments in businesses dealing

with alcohol, gambling, drugs or anything else that the Shari’ah considers unlawful iv) a prohibition on

transactions involving masir (speculation or gambling) and (v) a prohibition on gharar, transaction in which

there is uncertainty about the subject-matter and terms of contracts – this includes a prohibition on selling

something that one does not own or unlikely will be owning in the future [5]. Islamic finance is considered to

be based on the concept of a social order of brotherhood and communal solidarity. The participants in

banking transactions are considered business partners who jointly bear the risks and profits. Islamic financial

instruments and products are equity-oriented and based on various forms of profit and loss sharing [6]. In the

KSA, a number of Islamic transactions/ financing methods are used by banks and other financial institutions

to invest in real estate and provide Islamic mortgage loans to clients. The major type is the Sukuk (plural of

Sak) which are Shari’ah-compliant bonds. Sukuk do not pay interest rather they generate a return through

actual economic activities in the form of using or leasing the underlying assets. Sukuk are generally built

around one of the following main contracts which are used by banks in the KSA to provide funding to buy

properties and these are: Al-Ijarah, Al-Mudarabah, Al-Musharakah, Al-Murabahah, Al-Istisnaa, Istithmar,

Al-Silm. Any proposed framework for solving the constraints to the financing of affordable housing in the

KSA has to work within the limits of the tenets of Islamic Finance.

The financing of affordable housing in the KSA is provided by a number of government bodies,

financial organizations and private sector companies [1]. These are: the public Sector, REDF, the private

sector and joint-stock companies, banks, charities and welfare organizations. There is a shortage of finance

.…………………………...………………………………………… :Theme ………………………… ……………………………………المحور:




4

that increases annually and it was found that the REDF contributes heavily towards the funding of the

purchase and development of affordable housing. There is little contribution from the private sector and

charities whereas joint stock companies are just starting to operate effectively in the KSA, thus, their

contribution towards the financing of affordable housing is still negligible [7].

3. CONSTRAINTS ON THE ISLAMIC FINANCING IN KSA

3.1. Socio-economical and cultural constraints

Socio-economical constraints are those which are imposed by the way society deals with its economic

affairs which in turn influence the decision of the finance providers in provisioning the finance and hence

affect the flow of finance to the client. Financial organizations such as banks and the REDF will be

concerned, for example about the way in which the property will be used/ altered during the mortgage

repayment period as this would affect its value [7] (see table 1, appendix A). In the Arabic/ Islamic world, it

is difficult to control this issue of alteration and change of use during the mortgage period as the tradition of

transformation and internal and external alteration of the property is rooted deep in the history of Arabic and

Islamic cities. Ibn Al Rami, Akbar and others have found a substantial number of such transformations

which occurred during these cities’ evolvement originally and also throughout their life [8, 9]. There are

reasons for the ‘transformation/ adaptation’ such as initial financial constraints faced by the client and the

client’s need for an additional income. This manifests into reality when the owner transforms a part of the

property into a shop that can be run by themselves or let to somebody else in order to generate additional

income to support the family [10]. Other reasons would include the need for more space for the growing

family, the need for visual and sound privacy, the need for outdoor space for children’s activities or

entertainment and a general wish for flexibility in design of spaces which are not incorporated in the present

housing design in the KSA [11, 12]. Mahmud mentioned similar reasons which are driven by lifestyle and

they include (i) the adoption (by the client) of some modern lifestyle features such as the installation of a

modern kitchen or bathroom (ii) the need to achieve a higher degree of privacy in some spaces (iii) the

adaptation to suit the owner’s lifestyle by, for example, increasing the number of free spaces or changing the

functions of some spaces. These transformations are a part of people’s socio-economic life scene in the

middle-east and are regularly practised particularly by low income group [13].

The Saudi society’s culture and the customer’s knowledge about loans indirectly affect the

financing operations of financial organizations. Borrowing in the Saudi Society is something which

is generally considered to be unacceptable and for most people in the society the concept is difficult

to come to terms with. The clients have a perception that the bank - which grants the loan - is in a

superior position and there is no equality in the relation between the two parties. On the other hand,

people do not know the difference between various lending rates and may have only a vague

perception of the terms and conditions of a mortgage loan in terms of whether the finance is given

free as part of a government social programme and whether it is halal (i.e. not prohibited by Islamic

Shariah) or not [7].

3.2. Constraints due to Building laws and regulations

Under the present Saudi Building laws, no permission is usually required for internal works such as

refurbishment, renovation etc. However, the property owner must seek permission to extend the property or

to convert part of his/her property for commercial or other uses. The permission is also needed if the owner

wants to change the elevations' configurations (e.g. to open new doors or windows), increase the built area

by building an external extension or the height of the house/ villa by adding an additional floor [14, 15].

However, these are difficult to police by the municipality as the alterations are undertaken behind the high

fences of the property. In the case of a violation being detected by the municipality, the long arm of the law

is not brought to bear on the landlord rather the landlord reaches some type of compromise with the

municipality for an amicable settlement. In addition to this the legal permission to convert a part of the

property for commercial use is granted easily without much difficulty as long as the street/ road is classified

by the municipality as commercial. Furthermore, the classification as such of a street/ (road) as residential is

not permanent and could be reclassified as commercial if applications made to the municipality by the

.…………………………...………………………………………… :Theme ………………………… ……………………………………المحور:




5

(owners)/ investors of properties in the area are approved. However, there could be some other difficulties in

this process as the conversion of the property or a part of the property for commercial use needs an approval

not only from the municipality but also in most cases from other parties such as the civil defence or health

authorities [15]. In summary, the present building laws in KSA restrict the owner's freedom of exercising his/

her rights to a certain degree. The existing laws are not strictly enforced as is the case in developed countries.

These issues may have legal and financial implications for the banks who lend money to the clients on a long

term basis. Banks are also concerned about the free land provision by the government. This happens because

those allocated the free land may not be the ones who deserve to receive it. Many times influential people are

allocated the free plot of land and then leave the land undeveloped because they really do not require to build

a dwelling house in that land, they simply aim to resell it at a higher price for profit. This phenomenon leads

the plots of land being left as ‘dead’ [7]. This may have a negative impact on the value of properties in the

surrounding area.

3.3. Financial constraints

A number of financial restrictions are faced by the major mortgage lenders (i.e. the banks and the REDF

in the KSA) and they can be identified as:

a. The financial market rigidities: these include the structure and performance of the Saudi financial

market, its stability level, level of risk of recovery, pricing etc [16]. Mortgage lenders therefore impose

restrictions on the use of the property to protect themselves against any claim or possible financial loss.

b. The Islamic financing practices: The current Islamic financing practices, as opposed to the ideal Islamic

financing system, have a number of pitfalls [5] that concern mortgage lenders and restrict their financing

practices. These pitfalls exist also in the Islamic financing system operated in KSA and they include the

following:

Liquidity: Sukuk liquidity is low [17] and this is because of the restrictions and market rigidities

imposed by current immature Islamic lending practices that limit liquidity. Financial instruments

which are needed to generate liquidity for Shari’ah-compliant mortgage lenders seem to be absent.

Liquidity constraints imposed on lenders tend to curb innovation.

Non-uniformity and associated uncertainty : banks usually submit themselves to a Shari’ah board to

ensure that they act according to Shari’ah principles. A document or structure that is accepted by one

Shari’ah board in one bank may be rejected by a different Shari’ah board of another bank.

Ownership risks: In nearly all methods of Islamic financing, the lender is at some stage the owner of

the financed goods. In some cases, the asset will be retained by the bank for a considerable period

and therefore the legal issues surrounding ownership, such as risk, insurance and maintenance

become important. Responsibility for these issues is allocated between the borrower and the

financier on a transaction-by-transaction basis. In the Islamic element of a syndicated project

financing, the majority of risks will be borne by the borrower, who will be responsible, for example,

for insuring the financed asset and naming the financier as an insured party.

Security/ recourse: A bank financing a transaction may expect to receive a mortgage over an asset as

security and the availability of such security will tend to reduce the price of the transaction. The law

of the jurisdictions involved varies and will have to be considered in determining whether

appropriate security is available. Mortgages over movable assets are forbidden and a financier can

only take security if the asset is pledged, which will often defeat the aim of the financing as a pledge

will require the financier to have possession of the asset. Other factors such as registration,

notarisation and payment of fees may also have an effect on the attractiveness of security in the

transaction structure.

Default: Conventional financing transactions usually provide for default interest on late payment of

amounts due, which is not possible in Islamic financing. In Islamic financing, the same effect can be

achieved in different ways. For example, some form of discount formula can be provided for where

an agreed rate of discount is applied for each day that payment is made prior to a backstop date. The

backstop date is chosen to reflect the latest date in which funds might be expected to be paid.

However, if payment is made after the backstop date then the financier cannot recover any additional

amount.

Document complexity: The majority of the difficulties brought into a transaction by the Shari’ah-

compliant elements are surmountable, even if this means that the documentation will be more

.…………………………...………………………………………… :Theme ………………………… ……………………………………المحور:




6

complex than in a conventional financing. For example, in a structure that combines conventional

debt with Islamic equity, the equity cannot be a part of the debt document (for example, a

participation agreement). This has been resolved in some cases by making the equity a third party

beneficiary to such document

Other types of pitfalls are found by a recent study and include the following [7]:

Financial risks: opportunities to provide loan finance in KSA are low and there is a high

financial risk. The rights of banks are not fully protected by present legislations. Banks have

another problem as there are two judicial systems in KSA; the Grievance Board or Diwan al-

Mazalim and the conventional judicial system and each of them may give a different verdict

for the same case.

The client characteristics: The availability of property loan essentially depends on the salary

and credit history of the client and the value of property. These criteria will narrow the

number of prospective clients who could apply for property loan particularly among low-

income citizens, and hence the number of mortgage loan applications that can be accepted

will be low.

The problem of finding and creating an Islamic financing mechanism: creation of new

products within the limits of the Islamic Shariah would be a challenge and banks have to

develop new Islamic financing mechanisms in delivering these products. When a new

Islamic mechanism is created, the bank compares the effect of the new Islamic mechanism

with the conventional one in order to assess the potential risk. As an example, the bank has

created an Islamic mechanism for selling up a property on paper before construction.

Therefore, when the bank engages in a commercial relationship with a building developer,

the problem is to find the right mechanism (which does not violate the Shariah) that control

such relationship and provide the right product to the client.

Banks’ lending history and policy: Some banks in the KSA started their mortgage scheme

only in 2009 and thus have little financial experience and awareness of the market needs and

how to respond to these needs. Other banks offer only one type of mortgage loans with a

maximum repayment period of 11-20 years only. The majority of banks have only limited

financing activity.

4. DISCUSSION

The study highlighted that funding provided to low-income people to purchase a property is inefficient

and insufficient at present and will continue to be in future unless constraints that affect the flow of financing

to low-income clients are resolved. These constraints can be categorized into internal and external constraints

(see figure 1). The internal constraints are those applied by banks to avoid any potential risk, protect

themselves against any possible claim and to get profit margins that they expected during the period of

repayment of the mortgage loan. It also includes their lending experience, awareness of the client’s needs,

the strength and flexibility of their financial activity, length of the period of their mortgage loans and number

of mortgage loans they provide to low-income clients. The external constraints include the culture of the

Saudi society regarding the use and alteration of the property. The study also highlighted the problem of the

education of the client regarding the financial issues. Ready-to-use Islamic financing mechanisms that can be

implemented by banks are absent and Saudi building laws that would control the building alteration and use

are not clear and loosely applied. In addition, there is a problem regarding the sluggishness of REDF

procedures and an insecure financial environment.

The external and internal constraints limit banks’ and other financial organizations’ ability to provide

finance to the low-income citizens. Banks should explore how to address the clients’ ongoing needs and

requirements such as the need for alteration of the property or change of use in the mortgage loan contract.

Banks and similar financial organizations should develop mechanisms to overcome the above mentioned

constraints. They need to introduce more types of mortgage loans in the near future to serve the various

needs of their clients. It is essential to ease the conditions of funding and develop flexible mortgage packages

that respond to low-income clients’ needs. It should take the low-income clients circumstances into account

and the mortgage loan conditions. Banks and the government have a duty to provide basic financial

.…………………………...………………………………………… :Theme ………………………… ……………………………………المحور:




7

education to the public. The customer should be educated about mortgage loan products and processes. They

should be taught that they are entering into a business transaction relation and the loan that they get will not

be subsidized by the government.

Internal constraints Banks’ and

other

financial

organization

s’ ability to

provide

finance to

the low-

income

citizens

External constraints

Risk assessment (extra factors are

considered)

Culture of the Saudi society

regarding the use and alteration of

the property

Assessment of profit margins

based on risk assessment

Education of the client regarding

the financial issues

The terms of conditions of

mortgages and other related loans

The absence of ready to use

Islamic financing mechanisms

Number of mortgages that are

provided per annual

Saudi building laws are not clear

and loosely applied

The strength and flexibility of

their financial activities in the

field of real estate finance

The sluggishness of REDF

procedures

Their depth of awareness of the

client’s present and future needs

Insecure financial environment.

Figure 1: The internal and external constraints that limit banks and other financial organizations’ ability to

provide finance to the low-income citizens

4. CONCLUSION AND RECOMMEDNATIONS

The previous section highlights various difficulties the banks face in providing easy, accessible and

efficient financing services to low income clients. These difficulties or constraints are suggested to be

categorized into internal and external constraints. The current Financial crisis execellently demonstrated how

these constraints could augment each other to hinder the efficient funding to low income citizens. However,

this should not excuse banks for not taking steps towards the improvement of their financial services at all

times. This research suggests that financial organizations which are involved in the funding and provision of

affordable housing such as government bodies, REDF, banks and investors should join efforts and set up a

framework for collaboration and a long term strategy that is capable of tackling the housing problem. The

government should set clear and well defined financial legislations that provide a secure environment for

banks. Free land should not be preferentially allocated to influential individuals and the government should

set a regulation on the time frame in which the land has to be developed. In the case of already allocated

plots of land which are left undeveloped, the Islamic principle of ‘Ihya Al-Mawat’ (i.e. revivification) of

unclaimed and unused land would be a possible solution to this problem [18]. One way to apply this concept

practically is to allocate plots of land to reputable giant companies which would set up the infrastructure

within a specified period. Then the land would be handed to low-income citizens. As the infrastructure is

developed in a large scale the land price, which includes the infrastructure costs, would be affordable to the

low income clients.

REFERENCES

[1] NCB (The national commercial bank): Economics Department. Market review and outlook, 15 June 2005,

Volume 15, Issue 9. Retrieved 2008 from http://www.alahli.com/pdf/er2005/15062005.pdf

[2] SAIF Saudi Arabia Investment Fund. Samba, 1 quarter 2006. Saudi Arabia and the real estate sector.

Retrieved 2008 from http://www.samba.com/Content_Managers/SAIF_QTR_REP/files/Q1_2006.pdf

[3] Struyk, Raymond J. (2005). Housing Policy Issues in a rich country with high population growth: the case of

Riyadh, Saudi Arabia, Review of Urban & Regional Development Studies, Vol. 17, No. 2. pp. 140-161.

http://www.alahli.com/pdf/er2005/15062005.pdf

http://www.samba.com/Content_Managers/SAIF_QTR_REP/files/Q1_2006.pdf

.…………………………...………………………………………… :Theme ………………………… ……………………………………المحور:




8

[4] Aldosary, A., Alshuwaikhat, H., Quadri, S. I., Raziuddin., M. (2007) Al Saedan Chair on Affordable Housing-

revised report, KFUPM, Volume I, determining affordable housing stocks in administrative areas, Saudi

Arabia Kingdom. April, 2007. Retrieved 2008 from

http://www.kfupm.edu.sa/crp/Saeedan/Volume%20One.pdf

[5] Freshfields Bruckhaus Deringer. (2006) Islamic finance: basic principals and structures. Retrieved October

2009 from http://www.freshfields.com/publications/pdfs/2006/13205.pdf

[6] Imady Omar & Seibel Hans Dieter. (2006) Principles and Products of Islamic Finance By 2006. University of

Cologne, Development Research Center. Retrieved October 2009 from http://www.uni-koeln.de/ew-

fak/aef/06-2006/2006-1%20Principles%20and%20products%20of%20Islamic%20finance.pdf

[7] Sidawi, B. (2009). Hindrances to the financing of affordable housing in Kingdom of Saudi Arabia. The

Emirates Journal for Engineering Research (EJER) Vol. 14, No.1, 2009.

[8] Ibn Al-Rami Muhammad Iibn Ibrahim. (1995) Al-Ilan bi-ahkam al-bunyan (in Arabic). Markaz al-Dirasat

wa-al-Ilam, Dar Ishbiliy, KSA.

[9] Akbar, J. A. A. (1992). The Architecture of the earth in Islam (in Arabic) KSA: Dar Al-Qebla..

[10] Al-Naim A. Mashary, Mahmud Shihabuddin. Transformation of traditional dwellings and income generation

by low-income expatriates: The case of Hofuf, Saudi Arabia, Cities, Volume 24, Issue 6, December 2007,

Pages 422-433.

[11] Al-Kurdi, F. (2002). The labor city in Dammam: an analysis of its house forms. Advanced workshop ARAR

602. King Faisal University.

[12] Darweesh, L. (2003) Dweller-initiated changes and transformations in Built environment: the impact of

building regulations. Unpublished MSC thesis. King Faisal University.

[13] Mahmud, Shihabuddin (2007) Identity crisis due to transformation of home environment: the case for two

Muslim cities, Dhaka and Hofuf, METU JFA (24:2) 37-56.

[14] Ministry of Municipal and Rural Affairs. (2009). Building permission regulations. Retrieved October 2009

from http://www.momra.gov.sa/.

[15] Personal contact. (2009). Discussion with the director of Dar Ghassan Architectural consultants firm, Al

Dammam.

[16] International Monetary Fund. (2006) Saudi Arabia: Financial System Stability Assessment, including Reports

on the Observance of Standards and Codes on the following topics, Monetary and Financial Policy

Transparency,

[17] Al-Fayez, Haitham. (2009). The Saudi Sukuk Market. Jadwa Research. Retrieved October 2009 from

http://www.assaif.org/content/.../3842/.../Sukuk+JADWA+Aug+2009.pdf.

[18] Malinumbay, Siti Mariam Salasal, S. (1998) The concept of land ownership: Islamic perspective, Buletin

Geoinformasi, Jld. 2 No.2, ms. 285 - 304, Disember, 1998. Retrieved October 2009 from

http://eprints.utm.my/4950/1/concept.pdf

http://www.kfupm.edu.sa/crp/Saeedan/Volume%20One.pdf

http://www.freshfields.com/publications/pdfs/2006/13205.pdf

http://www.uni-koeln.de/ew-fak/aef/06-2006/2006-1%20Principles%20and%20products%20of%20Islamic%20finance.pdf

http://www.uni-koeln.de/ew-fak/aef/06-2006/2006-1%20Principles%20and%20products%20of%20Islamic%20finance.pdf

http://www.sciencedirect.com/science?_ob=PublicationURL&_tockey=%23TOC%235909%232007%23999759993%23673908%23FLA%23&_cdi=5909&_pubType=J&view=c&_auth=y&_acct=C000052469&_version=1&_urlVersion=0&_userid=1372795&md5=6f89a8ba755aae68252cce06d624f917

http://www.momra.gov.sa/

http://www.assaif.org/content/.../3842/.../Sukuk+JADWA+Aug+2009.pdf

http://eprints.utm.my/4950/1/concept.pdf

.…………………………...………………………………………… :Theme ………………………… ……………………………………المحور:




9

APPENDIX A:

Table 1: The weightings of characteristics of the property and the owner’s rights on the property value as

evaluated by banks (source: the researcher’s survey on the major 12 banks and REDF in KSA in 2008)

Property characteristics and owner’s rights Weighting out of 10

1. Partial transfer of the ownership 0.17

2. The transfer of right to benefit to a third party 2.83

3. Commercial investment in the property by owner (i.e. use part of the property for other uses such

as commercial) 3.00

4. Management of the property by a third party 4.00

5. Building adaptability 5.27

6. The owner occupant daily lifestyle activities 5.33

7. Energy efficiency of the property 5.50

8. Internal alteration carried out by the owner to suit his lifestyle 5.83

9. Maintenance and management practices of the owner 5.83

10. External alteration carried out by the owner to suit his lifestyle (i.e. external extension) 6.36

11. Building quality 7.33

12. Other criterion (i.e. building location, age and area) 8.40

The funding of affordable housing in the kingdom of saudi arabia

Documents

Transcript of The funding of affordable housing in the kingdom of saudi arabia