JEDDAH — Several citizens have sought the intervention of the ministries of housing and commerce and industry to rein in hikes in the selling and rental prices of residential apartments in the city. They say investors and landlords unfairly increase the prices of residential buildings and apartments by cashing in on the huge demand and short supply, Makkah daily reported. According to local residents, investors in the real estate sector sell their newly constructed buildings for a huge profit reaching up to four times the actual cost of construction. This forces landlords to charge a high rate of rent from tenants. This was the reason for a high rent rates even after the city witnessed the construction of hundreds of new buildings, citizens pointed out. They said real estate investors are exploiting the Ministry of Housing's decision to offer financial assistance to those who build flats that cover a certain area. This area was recently reduced from 250 sq. meters to 180 sq. meters. Citizens claimed that as a result of this reduction, real estate investors have deliberately reduced the space of residential apartments without cutting the rent prices accordingly. Ali Omarain, a citizen, said “The price for owning a five-room residential flat whose total area was reduced from 250 sq. meters to 180 sq. meters has reached SR900,000 and the price for a three-room flat reached SR500,000. “Most often, it is impossible for tenants to meet landlords directly to discuss about rents. “The landlords entrust watchmen of apartments to negotiate with tenants and get them to agree to high rates of rents.” He said citizens on low and middle incomes are the main victims of this. Abdullah Al-Ahmari, chairman of the real estate evaluation committee at the Jeddah Chamber of Commerce and Industry, said investors in the real estate sector sell their buildings for much higher than their actual value. “This forces those who bought the buildings to charge high rates of rent from the tenants and such an exorbitant rent is unaffordable to ordinary people. “This desperate situation forces many citizens to prefer staying in undeveloped neighborhoods or construct homes on encroached land.” Al-Ahmari said the Ministry of Housing is yet to take steps to put an end to this “crisis” faced by many ordinary citizens. Nasser Abdullah Basunbul, owner of a real estate development company that offers rent ending in ownership schemes involving villas and apartments, said most investors sell their new apartment buildings for prices four or five times higher than the real cost of the property. He said: “These greedy investors are keen to exploit the huge demand for residential units from citizens. “They charge more than SR800,000 for a flat for which they had spent nearly SR200,000.” He blamed authorities for not taking enough action.
