Jul 03 2011
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Saudi Arabia: Expatriate tenants feel the heat of rent hikes
A large number of tenants said they are suffering at the hands of merciless landlords who increase prices according to their moods. They added that landlords' pockets have become bottomless wells and they are driven by greed.
Pleas to authorities to pass a law to regulate price increases have fallen on deaf ears.
An interesting trend has also started to occur where landlords are buying villas, demolishing them and constructing new buildings there. They say there is more profit in leasing out apartments due to the lack of laws.
They said not only are the rent hikes unreasonable, the landlords have adopted a "pay up or leave" policy as they know due to the shortage of houses other desperate tenants will pay up.
Suisse Group AG estimates that the Kingdom will need 2 million homes by 2014 to keep up with the demands of a population that has quadrupled over 40 years.
Expatriates who can afford rising rent prices said they have trouble finding suitable accommodation and often end up settling for something that is not only expensive, but also in poor condition.
They added that the rent increase is not in line with any pay rises they receive, putting a huge burden on them. "Nowadays, a four or five bedroom apartment is being leased at SR20,000 plus. I had to change my apartment because the landlord increased the price from SR15,000 to SR19,000," said business development executive F. Ali, who lives in Jeddah's Al-Faisliyah district.
"Another major problem with the rent increase is that landlords are not offering any incentives. The buildings are old and have very little or no maintenance. The price increases are being used to fill the landlord's pockets and nothing is being done to maintain the building, so residents are losing either way," said Ali.
L. Ansari, an expatriate doctor who lives in Alkhobar, considers a hike in rent a big issue. Being a father of three, he is especially frustrated due to the rise in school fees.
Ansari also mentioned that in Alkhobar the rent of a two bedroom apartment is at least SR20,000, making it difficult to find an affordable, decent-sized home. To cope with the rising prices, Ansari and his wife are both working.
R. Bhatti, who lives with his wife and two children in Riyadh and is employed in the private sector, is also facing a difficult time in his life due to the rent hikes.
Their rent increased from SR24,000 to SR25,000, an increase that was enough to force them to move to a smaller apartment in the same building.
The new two-bedroom apartment does not have a living room and only one bathroom, despite costing the same to rent as their previous apartment.
Bhatti's company rent allowance is SR18,000 and the rest comes out of his pocket.
On average, his monthly rent is SR2,100, while the company allowance is SR1,500. The extra SR600 puts a strain on his finances because he only makes SR5,000 a month. He also pays SR3,000 a month for his children's school fees. Bhatti is left with SR1,400 every month to run his house and meet expenses such as groceries, fuel and supplies. To make ends meet, both husband and wife are working.
H. Kassem is an expatriate who had expressed serious concerns on the increase in rent prices. He works as a marketing manager in the private sector.
He was living in a compound but it was demolished and all the expatriates there were asked to vacate. If they wished to return there, they were offered a place at a much higher price.
Kassem said finding a new place was extremely difficult and attributed it to the shortage of good homes available in Jeddah.
© Arab News 2011
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