May 08 2013
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Rent set to increase every 5 years
Rents will increase every five years due to the negative impact of recent decisions that obligate owners of vacant lands to either build or sell the land altogether.
Owners not able to build on their vacant lands may be forced to sell, according to experts in real estate.
Talal Samarqandi, chairman of the Engineering Houses Commission at the Jeddah Chamber of Commerce and Industry (JCCI), said, "The percentage of vacant lands in Saudi cities lies at 50 percent. However, selling such lands will cause a rise in the price of housing units every five years because of the increase in the volume of sales."
"The Ministry of Housing should help land owners to build on their lands," he told Arab News.
Shuwaish Al-Dhuwaihi, the minister of housing, said that 70 percent of the land plots in cities are vacant, which threatens social stability.
"The expropriation of properties for the public interest is done around the world. We might adopt this strategy, albeit in a limited fashion," he said, adding that his ministry has no intention to buy land to build housing units.
He explained that owners are warned that the country will expropriate their properties if they do not develop the vacant spaces in the next few years, with more land expected to be handed to the ministry soon.
Nearly 60 percent of about 20 million citizens live in rented apartments, according to estimates from Corporate Commercial Real Estate Services (CBRE), the world's largest property services firm.
Abdullah Al-Ahmari, chairman of the Real Estate Appraisal Committee at the JCCI, said, "Some landlords have hiked their rent prices by about 50 percent. It is very difficult for people with limited income to rent apartments at a reasonable rate," he said, claiming there are only 2,000 available homes in Jeddah and that it necessary to find more housing units to maintain balance between supply and demand.
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