JEDDAH — Developers and real estate experts have voiced concern that beneficiaries of housing loans in Makkah will not be able to purchase a home with the money granted by the Ministry of Housing because of high property prices in the city. In order to be eligible for the loan, the ministry has specified the housing unit should have an area of 175 sq. meters. But the price for a ready-to-occupy apartment of the same area ranges from SR650,000 to SR700,000. This means beneficiaries who are granted loans worth SR500,000 will have to add an amount of between SR150,000 and SR200,000 by borrowing from local banks, Arabic newspaper Makkah reported. Real estate experts said loans granted to residents in cities such as Riyadh, Jeddah and Dammam are sufficient to purchase a three-bedroom apartment in good residential neighborhoods. Member of the National Committee for Real Estate at the Council of Saudi Chambers Bandar Al-Humaidah confirmed the money that the Ministry of Housing and the Real Estate Development Fund lends to citizens is not enough to purchase a housing unit in Makkah. "Citizens will have to get another loan from a local bank or from other sources so they can purchase a suitable housing unit in the holy city," he said. Al-Humaidah added: "The minimum price of a pay-to-own apartment in Makkah is SR650,000. A citizen in Makkah will need an additional amount of between SR150,000 and SR200,000 to purchase the cheapest pay-to-own apartment with at least three rooms.” Member of the real estate committee at the Makkah Chamber of Commerce and Industry (MCCI) Ridah Kurdi said the prices of pay-to-own apartments in Makkah differ from one location to another. "One might find an apartment for SR500,000 but it will be a small one. The additional area that a family will need in the long run can only be purchased if they take out additional loans," he said. Kurdi said real estate development companies have made a fortune designing and constructing buildings. “Real estate development companies have made good profits by providing products with suitable areas for Saudi families, whether they have taken loans from the Ministry of Housing or have the financial capability to purchase ready-to-occupy apartments,” he added. Real estate developer and expert Fahd Al-Mousa said the residents of major cities would find suitable pay-to-own flats at a price similar to the loans granted by the ministry. This excludes some areas where the price of an apartment may reach as high as SR1.5 million. Al-Mousa said western, southern and eastern parts of Riyadh have an abundant supply of pay-to-own apartments where a unit having four rooms and a hall is sold for SR500,000. These housing units are located in residential districts where all services including infrastructure and government utilities are available. However, it is difficult to own an apartment in northern Riyadh due to the high price of real estate, which can reach up to SR3,000 per sq. meter. Al-Mousa said real estate development companies have moved to planned districts in the outskirts of cities to make available pay-to-own apartments within a price range of SR350,000 to SR500,000. The average apartment size in these districts is 240 sq. meters. Meanwhile, residents of rural areas said they prefer to build their own houses due to the availability of plots of land at reasonable prices.
