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Saudi property rental spiral to be controlled by new policy
| Published: | 2 Aug at 6 PM |
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Tagged: Property Abroad, Australia
Soaring real estate rents in Jeddah are being blamed on the extensive construction of smaller two-bedroomed units aimed at the expat community.
According to chair of the Jeddah Chamber of Commerce’s estate evaluation committee, Abdullah al-Ahmari, the focus on apartments suitable for expat living has resulted in a shortage of the larger apartments preferred by Saudi families. The gap between supply and demand, he said, has forced the rise in rentals, expected to last for at least five more years along with the shortages.
Rental control, he explained, with be via specialist evaluations of the value of each property and the rent it should attract as a result. He believes that the new rent policy will protect tenants and landlords alike, and will help to stabilise rising rental prices by bridging the gap between supply and demand.
After a far rent is fixed, he added, the landlord will be issues a license to rent out the property. All rents will be based on the real estate value of the apartment, and realtors will have to abide by the valuations and rent recommendations as set.
Expats and Saudis have been complaining about the high rents being charged for small apartments in new-build blocks. Another cause of complaint has been landlords’ demands for an annual increase in rent from existing tenants, with many being forced to leave if they cannot pay more.
According to the landlord of a new-build apartment block in an upscale district of Jeddah, it’s the expats who leave their families in their home countries and expat couples without children who have forced the change in the style of apartments being built. At the present time, the total increase in annual rental income across the board is estimated at around SR500 million.
According to chair of the Jeddah Chamber of Commerce’s estate evaluation committee, Abdullah al-Ahmari, the focus on apartments suitable for expat living has resulted in a shortage of the larger apartments preferred by Saudi families. The gap between supply and demand, he said, has forced the rise in rentals, expected to last for at least five more years along with the shortages.
Rental control, he explained, with be via specialist evaluations of the value of each property and the rent it should attract as a result. He believes that the new rent policy will protect tenants and landlords alike, and will help to stabilise rising rental prices by bridging the gap between supply and demand.
After a far rent is fixed, he added, the landlord will be issues a license to rent out the property. All rents will be based on the real estate value of the apartment, and realtors will have to abide by the valuations and rent recommendations as set.
Expats and Saudis have been complaining about the high rents being charged for small apartments in new-build blocks. Another cause of complaint has been landlords’ demands for an annual increase in rent from existing tenants, with many being forced to leave if they cannot pay more.
According to the landlord of a new-build apartment block in an upscale district of Jeddah, it’s the expats who leave their families in their home countries and expat couples without children who have forced the change in the style of apartments being built. At the present time, the total increase in annual rental income across the board is estimated at around SR500 million.
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