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KSA: Increasing cost of housing hurts expats

By Joe Avancena DAMMAM -- George Varghese would like to vacate his two-bedroom rented apartment in an old building here because his landlord has notified him that the rent has been increased to SR16,000, up by SR4,000 from the SR12,000 he paid last year.

Varghese contacted real estate offices around Dammam with the hope that he would be able to find a cheaper apartment. The agents he contacted, however, offered him much higher rates than the price he is now paying.

"It is difficult to find an apartment that I can afford; I will have to continue staying in my present apartment and beg my landlord to reduce the SR16,000 he is demanding," Varghese said.

Varghese works as a warehouseman, while his wife is a nurse in a private medical dispensary here. Their combined take home pay is around SR5,000, which means that their housing allowance of SR10,000 (two months salary per year) does not cover their current rent.
Out of their combined take home pay of SR5,000, the family budgets the expenses of their three children who are going to school, food, electric and water bills, car maintenance and gasoline expenses, and miscellaneous expenditures.

Many tenants like Varghese are suffering because of the spiraling cost of rent. Many tenants like them are unable to complain to authorities, like the newly formed, Ministry of Housing, because of the lack of clear laws regulating real estate owners. "You do not know whom to take your grievances to when greedy landlords tell you to pay rent that is beyond your means," Varghese said.

"Tenants, many of them expatriates, are often the victims of unfair rent increases by landlords whose usual excuse is that they are only adjusting the rent to keep up with the rate of inflation," a Dammam real estate agent said. He said he is often surprised to learn that some landlords are hiking their rent by more than 25 percent.

"There should be some kind of regulation that would provide protection to both tenants and owners of buildings," he said. "We need rent control laws that do not just regulate rent increases. The laws must also deal with the landlords' responsibility to make repairs, and with lease renewals and evictions. The need for a clear law is necessary and urgent," he said.

In Dammam where many apartment buildings are old, a three-bedroom apartment now costs SR20,000 a year. In Al-Khobar City, that same apartment cannot be rented for less than SR25,000.

© The Saudi Gazette 2011