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Abstract

Real estate investment is one of the most prominent areas of investment in the world, as it achieves for the investor constant annual returns - rental returns - and a growing value of assets in the long term, especially in stable investment environments such as that in the Kingdom of Saudi Arabia. Residential real estate investment is also one of the largest investment opportunities in the Saudi real estate market because of the growing demand for housing units with the increase in housing growth rates in the Kingdom, in addition to the gap between supply and demand at the present time in favor of demand. This gap encouraged developers to enter the field, whether they are individuals’ establishments or companies.

This study seeks to answer several questions: Is the cost of real estate development for real estate companies higher than for individuals? And why? Will individual developers differ in their development methodology, or do they work the same? Are the price components of the real estate product equal between individual developers and companies? In order to obtain answers; A study and analysis of four case studies were conducted, one for a large real estate development company (a large company) and three for individual development establishments (a small one). These projects are in Riyadh city, and the research studied them in the period of time between 2013 and 2015.

The study came out with a model to reduce the cost of development for real estate development companies operating in the Kingdom of Saudi Arabia, which will encourage individual developers to switch to organized institutional work and contribute to ridding the residential real estate development market in the Kingdom of the existing randomness, which will be reflected on the citizen in the long run as it will contribute to increasing The supply of housing units and the rebalancing of the residential real estate market in the Kingdom.

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