Last year's Jeddah floods not only claimed many lives and damaged property, but also had a spillover effect on other aspects of life. Following the disaster, housing rentals have risen in districts where the chances of inundation in the event of rains are low. Any escalation in house rent is bound to directly affect expatriates, especially low-income workers, whose monthly expenses are basically determined by rent, groceries, and telephone and electricity bills. “The rent of my flat increased when the yearly rental contract had to be renewed. This is very worrying for me,” said an Afghani national Wafi Ahmed, who works in a carpet company in Jeddah and lives in Al-Azizia. “Expatriates like me are finding it difficult to organize our monthly budget because of the rental hike,” he added. At least 30 districts of Jeddah, mostly in south and east Jeddah, were badly affected by the floods in November last year. House rents have gone up in areas that are at a higher elevation while they have remained the same in low-lying areas. The scale of the destruction is spurring residents in the worst-hit areas to move elsewhere. However, the exorbitant house rents in other districts have left many struggling to find a place that they can afford. Muhammad Lateef Khan, an Indian expatriate, said his annual house rent increased from SR16,000 to SR18,000 after the floods. “I have been living in this house for the last four years. Even though SR16,000 was a little beyond our financial limits, we decided to rent the house because my children's school and a few grocery stores are nearby, even if that meant spending more than our housing allowance. However, the further hike in prices has worsened our financial situation,” said Khan, who lives in Mushrifah District and works in a construction company. He said he hoped his company would increase his housing allowance this year. “I am sure all other expats and Saudi residents, who are not living in low-lying areas, are also facing the same problem,” he added. Khan, it seems, is indeed not the only expatriate to experience bouts of anxiety when renewing a house rental contract. Ahmed Khan, an Indian national, is one such expat whose housing allowance does not fully cover his house rent. He lives in Al-Azizia. “Compared to other cities, expats in Jeddah spend more on housing. Nineteen percent of the compensation package of employees in Saudi Arabia is housing allowance. However, in view of the current spike in house rents, we are spending over 22 percent of our income on accommodation expenses. So the housing allowance only partially covers the housing costs,” Ahmed Khan said. Inflationary pressure in the Kingdom is expected to continue during the first quarter of 2010 but at a lower rate than in the fourth quarter of 2009, according to the Saudi Arabia Monetary Authority's quarterly inflation report, which said that “some pressures” will persist due to housing costs. Confirming the hike in rental prices after last year's floods, real estate agent Abdul Razzaq said: “Many expatriates are simply not renting apartments in localities where the prices rose dramatically after the floods.” “However,” he said, “it is interesting that the house rents in localities where people suffered the most due to flooding have remained the same while the spike in prices is taking place in areas where there has been no destruction”. According to newspaper reports, the increasing cost of land in some areas has resulted in the rental hike. “For instance, a three-bedroom flat in Al-Rehab or Al-Azizia districts will cost you about SR35,000 annually while a similar flat in Haie-Al-Naseem District will cost you not more than SR18-20,000 annually,” said Razzaq. “People want to move to safer places but sadly, that can happen only at a price – a big price,” he added.
