Housing prices see sharp rise in Saudi Arabia

Housing prices in Saudi Arabia have experienced a sharp rise in the past  few months,  said Arab media including the Al-Madina daily.

The prices of apartments in the biggest Red Sea port city of Jeddah experienced a four-fold rise in value in several months only.

The rise comes after the Saudi Ministry of Housing , late last year, cut short a major financing program that would help potential home buyers pay for apartments ranging from 250 square meters to 180 square meters.

The move led to a number of properties in populated districts across the oil-rich monarchy being sold at nearly $200,000 or roughly equal to four times the cost of building them.

What was more worrying to home buyers was that officials, construction companies, and investors were blaming each other for the dramatic increase in prices.

The Jeddah Chamber of Commerce and Industry described the prices to local media on Sunday as “exaggerated”. Traders, in the field of construction, on the other hand said investors have set prices that were “unjustifiable”.

Saudis, mainly those who intended to buy a house, were not happy and demanded the ministry take action against “investors’ greed,” according to reports. 

Abdullah Al-Ahmari, the chairman of the real estate estimation committee, a branch of the Country’s chamber of commerce, said that “ it is time to take real and fast measures to curb prices and generate solutions and alternatives for citizens to prevent them from seeking unplanned districts and being deceived into buying encroached government land.”

Nasir Basunbul, owner of a real estate development company told Al-Madina that the “market nature and the supply and demand rule govern the process of pricing. But, many apartments are way overpriced and simply are not worth their claimed value.”

Prices were not negotiable, said Ali al-Omarain, a citizen, from Jeddah , who called on the ministries of housing and commerce and industry to prevent a full-blown housing crisis.

 “You can't negotiate, because owners assign the building doorman to tell you the price or assign a real estate agent who shocks you with unbelievable prices that reach SR900,000 for five-room apartments and SR500,000 for three-room ones. “It is greed and exploitation, while concerned bodies are taking no measures to stop it.”

Saudi Arabia is the biggest economy in the Middle East according to financial observers.

The country, however, has been under fire from activists from within the country who say that hundreds of thousands of Saudis live below the poverty line and cannot afford to even rent a place to live in.

The country’s government in the past years adopted several regulations that would help first time home buyers, but they weren’t enough, experts say.

HDS/HA

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