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The prefabricated construction market in Saudi Arabia is expected to grow in the coming years due to lack of affordable houses in the county due to growth in population and inflow of expatriates. This could boost demand for cost-effective prefabricated homes. To support development of affordable houses, the Ministry of Housing intends to encourage the construction of factories producing prefabricated housing units and other modern technologies.
Moreover, as part of Vision 2030’s housing program, the Ministry of Housing intends to increase residential ownership among its citizens to 70% by 2030. To improve ownership, under the Sakani housing programme, the ministry offers residential plots, self-construction residential housing, prefabricated housing units, and under construction housing units to families.
In 2019, the Ministry of Housing offered free land over 90,000 families; prefabricated housing units to over 117,748 families; and provided more than 39,332 under construction housing units. In November 2020, 3,499 contracts for residential plots were finalized. Also, in the same month, around 42 prefabricated housing projects providing 14,000 residential villas were reported to be completed. Presently, in Makkah, there are three key housing projects under-construction, along with 19 residential projects offering 6,531 plots.
In 2016, the government imposed 2.5% tax called White Land Tax (WLT) on vacant or undeveloped plots in urban areas to better address land shortages, provide residential land at reasonable prices, protect competition, and stop monopoly. The first phase of WLT generated US$373 million (SR1.4 billion) and Ministry of Housing announced to move this initiative to its second phase in Q1’21 to further encourage developers to fast-track land development to avoid tax payment and further support Vision 2030. This initiative is likely to further support growth of affordable housing including prefabricated housing in KSA.
Also, in December 2020, STC Group, announced plans to launch data centers at Jeddah, Riyadh, and Madinah, using prefabricated and modular solutions in order to ensure business continuity and service uptime. The data centers will be built with 150+ prefabricated modules.
Key manufacturers and contractors in the prefabricated building market include Zamil industries, Red Sea Housing, Al-Shahin Metal Industries, United Company for Caravans and Prefab Houses, and Kirby Building Systems.
