A serious issue facing not only expats who may be coming to work in Saudi Arabia but for the residents as well is the severe housing shortage. This is particularly noticeable in Riyadh where the demand far exceeds the available supply. This housing shortage is attributable to several reasons:
- Rising inflation and cost of living making affordable housing prohibited to many Riyadh residents.
- The majority of Saudi Arabia’s population is under 20 years of age. As these individuals start to join the workforce and marry, leaving their family homes, there is a new influx of citizens seeking affordable housing.
- There has been an increase of large contracts and projects being awarded to international firms who are exporting more workers into the Kingdom adding to the housing shortage.
The housing shortage is particularly noticeable for the expat who has accepted a job in the Kingdom but responsible for finding his own housing. He will likely acquire a copy of “Riyadh Today” pocket-size book and start culling through the pages of compounds. But he will find after calling each and every compound most are either not even taking names for a waiting list or have a minimum of a two year waiting list. All compounds are full.
Many compound owners are also taking advantage of the housing shortage and raising rents exponentially as leases expire. I know of one individual whose rent was raised from 200,000 SAR (per year) to 300,000 SAR (per year) and is now among those trying to find more affordable housing. Sadly due to the shortage compound owners can demand and receive such rents.
So what does one do when accepting employment in Riyadh? My advise is to make sure that the employer will provide housing. It is never an enjoyable experience to interact with realtors and compound managers in Riyadh. There are language barriers, lackadaisical attention spent to clients needs, punctuality issues let alone having to face negotiating and enforcing lease agreements and commitments on the part of the landlord. Don’t forget, when signing a lease in Saudi Arabia, in most cases the full years rent must be paid upfront in advance which leaves a landlord little incentive to see to needed repairs or problems.
If you are responsible for acquiring your own housing make sure to have adequate lead time for this endeavor. Be willing to take a temporary place at a furnished hotel/apartment which allows you to rent month-to-month while you take your time and find the right place for your needs. Don’t be shy in asking anyone and everyone about housing leads. Drive around In the area you would like to live in. Ask security guards if they are aware of any vacant dwellings or ones soon to be vacant.
And following is a good publication prepared by Colliers International with a comprehensive review of the Riyadh real estate market:
Riyadh Real Estate 2007 Overview produced by Colliers International: http://www.colliers.com/Content/Repositories/Base/Markets/UAE/English/Market_Report/PDFs/RiyadhMarketOverviewQ42007.pdf
Filed under: culture, Economy, Saudi Arabia, Saudi culture, Saudi customs, Saudi education, travel, Uncategorized |
American Bedu 
The whole middle east seems crazy with accommodation at the moment.
In Abu Dhabi, the price of a 1 bedroom apartment is USD$33000 per year. 2 Beds is $42000. 3 beds, unimaginably high, around $60000. That is assuming you can find one in the first place.
It seems to me building houses made of Lego blocks or even biscuit tins seems cheaper than finding a house in Riyadh. But I don’t know what about Jeddah, Dhahran and any other Saudi cities.
Maybe the government should set up a low cost housing programme. The can learn from the countries that succeeded in this programme.
If the average Saudis have problems in finding an affordable house, what about expats and whoever is posted to Riyadh?
Same issues in Khobar although the building of villas/apartments and compounds has tripled in the past years. There has been a major growth in Saudi, add in that materials cost more, add in general inflation and a high fraction of greed and you get rents that are outrageous.
Our villa was 225,000 SR when we first moved in, it is now starting at 375,000 SR and going up. (we are moving out)
You could get a great place on a compound for anywhere from 75,000-125,000 SR in Khobar a few years ago now these prices have doubled for accomidations that are no where near where it was a few years ago.
Of course the same can be said for Bahrain. When we looked for a house the man started at 250,000 SR within two weeks he went up to 280,000 SR within the next month the exact same layout home that he sold for 280,000 SR went for 320,000 SR. Rediculous.
For expats many companies will pay the amount the compounds are asking. Hence those who pay out of pocket or even saudis who have taken up on the compounds have to move out. Which also accounts for some of the increase, if they’ll pay they’ll charge it.
Buying a home for an expact is an ordeal of jumping through hoops for approval. You’ll find that more newlyweds are living in the family home rather than what took place several years ago. Average Saudi households can’t get loans to purchase a decent home and will rent most of their lives.
There needs to be acceptable increases for pre existing rental properties. There is no real limit unles you read those contracts (we did and they were unable to increase our rent last year by a 125,000 SR).
A very frustrating thing to deal with (and we are dealing with it blaaah!!)
Orbit news also showed a trend in the states of Colorado and Oregon that due to the poor economy builders were building new “gingerbread style” homes which were attractive, functional but only a quarter size of the typical American homes. That probably would not work in KSA due to the increased family sizes here but the housing/rental market is pitiful indeed.
I see it happening because in regards to the atrocious rates of compounds, it is usually companies and not individuals paying those rates. The compound owners are going to continue to raise the rents as long as companies will lease from them at such rates.
Again, it is the individuals, whether they are Saudis or expats who are most feeling the crunch.
Yeah…Bahraini landlords are out for every dinar they can get. Rents have skyrocketed this past couple of years. The law says that rent cant be raised more than 10% in one year…however…most tenants arent aware of this and are put under extreme pressure to suddenly come up with twice the rent almost over night when some unscrupulous owner ups the rent. Read the letters page here in Bahrain and all you see are people complaining about landlords that want to chuck them out cause they either want to raised the rent considerably or cause they expect the current tenant to suddenly come up with it without warning. The govt is doing nothing about this….apparently all this construction going on is going to solve the problem…however…the typical Bahraini cannot afford even a quarter of the rent prices on whats currently available with the low salaries paid to them…why would the govt assume they can suddenly afford to live in high rise state of the art apartment buildings on that same salary is beyond me. Bahrain is an island…space is limited…prices can only go up…sigh.
Although Saudi Arabia is not an island much of what you described is also applicable here.
On a related note my husband and I remarked just today while out and about in Riyadh how we see an increase in adult beggars at the various interchanges.
there are a few new compounds coming up in riyadh and also a lot of new construction by builders.
one great way of getting into compounds and/or finding off-compound housing is through the “tea boy” networks. most offices will have at least one very well connected tea boy who will be able to help if you are willing to pay his fee. they can sometimes be more resourceful than real-estate agents.
additionally the really hard but fairly effective way to get non-compound apts is to do the legwork yourself. drive around in the area that u want to live in, stop at apt buildings, talk to the concierge, if they dont have anything available (and u were “nice” to them) they will be able to point u in the direction of buildings that do have availability.
Thanks for sharing ruhsa!
Great Post!
I have a question regarding my current situation…
What do you guys think about purchasing 2mln SAR villa in a heart of Riyadh? My husband and I think it will be a good turn…its a brand new villa with pool and I am wondering what do you think of it as an investment?
Please advice,
thank you,
Amira
Thank you and welcome Amira!
It would indeed be an excellent investment. However, are you or your husband Saudi? While the regulations have changed allowing non-Saudis to buy properties there can still be risks involved as a non-Saudi and owning property in Saudi Arabia. I am aware of a number of GCC Arabs who have bought in KSA and very happy to have done so. I’d just make sure before buying that one is secure with their sponsor holding the iqama and confident of no difficulties or incidents that could prohibit them from traveling freely in and out of Saudi Arabia.
Thank you for answering 🙂
Yes, he is a saudi and also working in the field with Ajmakan project(have you heard about it?)
We do have one concern as the villa is right across from Masjid and on friday there is a lot of cars parked on the same street..do you think that this might be a problem with resale? What do you or your friends think of it?
Thank you for all suggestions,
Have a blessed evening,
Amira
I’m not familiar with Ajmakan project, Amira.
The close proximity of a mosque to the villa could be a resale issue. I know when we were looking for an initial place to rent before our own villa was ready we did not want someplace too close to a mosque for the very reason you mentioned.
Best Regards,
Carol
Thank you, Carol.
Regarding the Ajmakan project, his yourhighness King Abdullah is going to be at the opening ceremony in January.
Check our this incredible project at http://www.ajmakan.com
Hope to meet you soon in Riyadh:)
all the best,
Amira
http://www.passionsofamira.blog.onet.pl
Amira, That looks like a beautiful project! I like the care for the environment it claims. The wadi, and the planting look lovely. And not too unnatural luscious if you get my meaning!
Thank you for the link and additional info Amira. It will be a pleasure to meet you in Riyadh!
Reuters picked up this post:
http://www.reuters.com/article/blogBurst/entertainment?bbPostId=B6kcqoGH9Pf8Bzn7nRZ5sNNoCz1i6lVN2NumpB7iDsfvFUqaA