A downturn in the Kingdom's real estate market due to new mortgage regulations isn't likely, said a leading real estate manager at one of Saudi Arabia's largest private wealth funds on the sidelines of the GCF in Riyadh this week. “We don't think it will slow down. There is a lot of demand there, which can be filled in the coming five, ten years. There's a lot of gap,” said Sameer Kazi, head of cooperate real estate investments for SEDCO Holding. “Owning a home is the first priority for most people. It's often the first investment, so we don't see [the mortgage regulation] as a challenge.” The comments come after the release earlier this month of a Jones Lang LeSalle report that said the new mortgage regulations would likely see “subdued” price growth in 2015 as the middle income segment struggles to raise the 30 percent required down payment. Kazi said that there would continue to be growth in the middle-income segment as it is a “huge” market, but that the new 30 percent requirement could be scaled back. “One should go below 30,” said Kazi. “The government is trying to be conservative by doing a 30/70, which is a great start, but given the vast size of the population, and to make it more affordable, they would need to allow some citizens to have a lower deposit down: 20 or 15.” Kazi said that high land values and the continued increase in the cost of construction was making overall affordability “not great,” and pushing more buyers toward apartments. “They are unable to afford [stand alone homes], so there is that acceptability now to go into apartments. People are going for, say, 3 to 5 floor apartments over high-rise buildings. What is key for them is a community feel.” According to data in the Jones Lang LeSalle Q4 Riyadh Real Estate Market Overview 2014, apartment sales continue to outpace villas, with apartment sales growing 11 percent, year-on-year, compared to only 4 percent for villas. According to Kazi, residential developments based around small clusters of low-rise apartment buildings are in high demand, but still only make up a fraction of the Saudi housing market. “Slowly it is coming up, but there's hardly any. It's just the beginning.” Most of the segments growth occurs in Jeddah, where it's easier to develop new styles of residential housing. “Riyadh has been better master planned over the years than Jeddah,” said Kazi. “Jeddah has a bigger canvas in terms of trying to come up with a new urban picture, whereas Riyadh started much earlier. It's more locked in.”