We are announcing a request-for-startups (RFS) in the real estate sector – a landscape of whitespaces in KSA.
STV is issuing its first request-for-startups (RFS). We believe PropTech is one of the largest whitespace opportunities in Saudi. The residential real estate market is undergoing a massive transformation and technology could be the catalyst to leapfrog the sector into the future.
Key Drivers of the Opportunity
Saudi residential real estate is benefiting from tail-winds generated by 3 main trends:
Government commitment: in line with the Vision target of 70% home ownership by 2030, the government is subsidizing financing for home buyers, injecting capital into lending institutions, providing the required digital infrastructure and modernizing regulations (Chart 1).
Favorable demographics: we estimate demand of at least $260bn for residential real estate in the next 10 years, just accounting for the 1.33mn households set to be first-time home buyers (Chart 2).
Strong emerging traction: value of outstanding mortgage grew 3x in the past 5 years, and the pace of origination remained strong even at the peak of the pandemic (Chart 3).
Main Bottlenecks
We mapped out the home-buyer customer journey and we see many opportunities for disruptive technology plays in Saudi, particularly in the following areas:
Improving home-finding ‘Discovery’: bringing the home offering online to improve visibility, convenience and enabling comparison. Today, people can spend up to a year in property search, due to information scarcity and broken incentives of traditional brokers.
Improving home-buying ‘Transaction’: digitizing the buying and selling experience. Today there is a supply/demand mismatch in the market and a speedy and seamless transaction is the largest need for buyers. We see an opportunity to digitally connect discovery, financing and closure.
Request for Startups
We welcome all ambitious and visionary entrepreneurs and any other stakeholders of the residential real estate ecosystem to reach out to us through this form and to share their ideas, proposals, concepts and ventures pitches. We are ready to partner by providing knowledge, support and capital.
Chart 1 - Government initiatives stimulating the residential real estate market
Chart 2 - Shifting age pyramid is expected to add $260bn of additional demand
Chart 3: in the past 5 years, the value of outstanding residential mortgages grew 3x