JEDDAH — The price of Jeddah apartments have experienced a sharp increase after the Ministry of Housing reduced the minimum space of apartments eligible to be purchased through its financing programs from 250 sq. meters to 180 square meters, Al-Madina reported.
Some properties in populated districts were selling for SR900,000, equal to four times the cost of building them.
While the real estate estimation committee at the Jeddah Chamber of Commerce and Industry described the prices as “exaggerated”, traders in the field of construction and marketing said investors have set prices that were “unjustifiable”.
Residents also demanded the ministry take action against “investors' greed”.
Chairman of the real estate estimation committee Abdullah Al-Ahmari said such prices limit options for people and could be a factor driving them away from planned, approved districts to seek unplanned areas and land plots that have been illegally encroached upon.
He said the ministry so far has not solved an ongoing housing shortage. He believed no sign of a solution was apparent despite government wanting to resolve the issue quickly.
“It is time to take real and fast measures to curb prices and generate solutions and alternatives for citizens to prevent them from seeking unplanned districts and being deceived into buying encroached government land,” he said.
Nasir Basunbul, owner of a real estate development company trading in apartments and villas, said the “market nature and the supply and demand rule govern the process of pricing that is variable.
“These factors govern free markets like the Saudi market.”
However, he said, many apartments are not worth their prices.
In fact, most investors set prices that are four to five times the real value of their apartments.
He said: "The field is already profitable for investors when they run their business well and construct classy apartments.
“Selling an apartment that costs no more than SR200,000 for more than SR800,000 may be considered exploitation.
“Whatever the level of finishing and location of the property, such prices are unjustifiable, and the concerned authorities are staying silent.” Ali Omarain, a citizen, said the ministries of housing and commerce and industry must intervene.
He said: “You can't negotiate, because owners assign the building doorman to tell you the price or assign a real estate agent who shocks you with unbelievable prices that reach SR900,000 for five-room apartments and SR500,000 for three-room ones. “It is greed and exploitation, while concerned bodies are taking no measures to stop it.”
