A shortage of apartments has led to a practice of 50 percent rent hikes by landlords, according to an Al-Madina report. Many Saudi residents have said they had no choice but to accept the increase in rents in order to keep living in their homes. Mohsen Muhammed said he pays SR25,000 in rent for an apartment in Al-Azizyia Distrct in Jeddah and suddenly the landlord increased the rent to SR 35,000. He said since he has only a limited income the new rent price takes up a major portion of his budget. Recent inflation of everyday goods has prompted an inflation of house rents, said Hamid Al-Lehani. He said the rents in Makkah have increased disproportionately from district to district. Some areas have a 100 percent increase while others only have a 40 percent increase and in some areas increase seasonally when more people travel to Makkah, such as during Ramadan or Haj. A 20 percent increase in the prices of steel, cement and oil has also contributed to the increase in residential unit prices in addition to an increase in the price of land where the units are built. Experts in the real estate have said the problem is rooted in two factors. One is economical and the other is the demographics of the country. Supply and demand are blamed on the increase in rents because there are insufficient apartments to meet the demand of the population. A 2005 Al-Watan report stated similar problems of rent hikes as well as a shortage. Experts have said over 1 million residential units must be built in the next five years. The demand for residential units is directly associated with the large proportion of young Saudis from 15-25 which constitute 37.5 percent of the population according to government census data. __
