RIYADH: The kingdom's capital has experienced a significant increase in apartment rental prices in recent years, making it difficult for many residents to afford suitable housing.
This sharp increase in the cost of rent has led to an increased trend among Riyadh's population to prefer home ownership to renting, as they seek to gain more stability and control over their lifestyles.
According to recent real estate market data, the average rent for a one-bedroom apartment in central Riyadh has risen to SR 5,000 ($1,300) per month (the figure varies daily). For larger units, costs can be even more staggering, with three-bedroom apartments often commanding more than SR10,000 in monthly rent, CBRE.sa reports.
High rental prices have placed significant financial strain on many middle-class and low-income families, forcing them to make difficult choices about their housing options. (A photo by Hajar Alkuser)
These exorbitant prices have placed significant financial strain on many middle-class and low-income families, forcing them to make difficult choices about their housing options.
“It has become almost impossible for my family to continue renting,” said Shahad al-Ghamdi, a young administrative manager who lives in Riyadh. “Even a typical apartment rent eats up a large portion of my monthly salary, leaving little room for other expenses. I'm seriously considering taking out a mortgage and buying a house instead, as it will ultimately be more cost-effective in the long run.”
quicklyThe facts
• According to recent real estate market data, the average rent for a one-bedroom apartment in central Riyadh has risen to SR5,000 ($1,300) per month (number varies daily).
• The Saudi government has introduced mortgage financing programs and other incentives to make it easier for citizens to purchase their own property.
• Economist and financial analyst Talat Zaki Hafeez warned that factors such as interest rates and inflation will play an important role in determining overall market dynamics.
Al-Ghamdi's sentiments are echoed by countless other Riyadh residents, who see home ownership as a more viable and sustainable option than the burgeoning rental market.
To address this pressing issue, the Saudi government has introduced mortgage financing programs and other incentives to make it easier for citizens to purchase their own property. As a result, demand for home loans has increased, with many banks reporting a significant increase in mortgage applications over the past few years.
However, as highlighted by the experiences of residents such as Ramona Harmon, the government's efforts to regulate the rental market through initiatives such as the Izar platform are believed to be largely ineffective.
High rental prices have placed significant financial strain on many middle-class and low-income families, forcing them to make difficult choices about their housing options. (A photo by Hajar Alkuser)
Harmon described the Izar platform as unresponsive and biased towards landlords, with tenants feeling their interests were not adequately protected.
Ramona said: “I've had experience with them (Azer), and they don't respond to people who alert them to overpriced apartments. They're supposed to protect both landlords and tenants, but they don't. They seem to favor landlords and owners.”
Harmon's concern raises the question of how the system could more effectively serve the people it was designed to help. Harmon's own rental experience has been a rollercoaster of broken promises and rising costs, with the landlord raising his rent by a staggering 58 percent despite the standard maximum of 5-10 percent.
High rental prices have placed significant financial stress on many middle-class and low-income families, forcing them to make difficult choices about their housing options. (A photo by Hajar Alkuser)
Harmon said she was able to contact Azer but they told her there is no law that prevents a landlord from extending a new lease.
Hormon, an expat working temporarily in Saudi Arabia, isn't considering buying a house and the rent is rising.
Economist and financial analyst Talat Zaki Hafeez acknowledged the ongoing construction boom in Saudi Arabia, which saw “the value of construction output reach $141.5 billion, an increase of 4.3 percent over the previous year.”
Hafeez believes this expansion in residential and office buildings could help bridge the gap between supply and demand, potentially leading to more balanced rental prices and improved housing affordability.
However, Hafeez also cautioned that other factors such as interest rates and inflation will play an important role in determining overall market dynamics. He is optimistic about the future, but stressed the need for continued efforts to address the root causes of the rental crisis and ensure housing is accessible and affordable for all.
“But we are still in a better position than the G20 member states and I believe that solutions are being made…it is only a matter of time to increase the supply of houses,” Hafeez added.
To truly address the rent crisis in Riyadh, the Saudi government must adopt a more comprehensive and responsive approach. This could include strengthening rent control regulations, empowering regulatory bodies like Ejar to effectively protect tenants' interests, and finding innovative solutions to increase the supply of affordable housing units.
By addressing the systemic problems inherent in the rental market, the government can help ease the financial burden on Riyadh residents and build a more inclusive and prosperous future for the city.
