Rental crisis in Saudi Arabia: If housing becomes a big burden on families

Khaled, the thirtieth employee in a medium business in Riyadh, would not find himself in a rising financial crisis, despite obtaining an annual increase in his salary. Over the past two years, its revenue has risen by only 4.4%, while apartments jumped by more than 25%in the north of the capital. Khaled does not represent an individual condition, but is rather one of the many citizens and residents who have a wide gap between wage growth and high rent. The high rent of more than five times the growth of wages official data shows a strict gap. According to the statements of the General Statistics General Authority, to the rise in rental prices between March 2022 and end of September 2024 with 25%, where the rental price index jumped from 86.33 points to 107.91 points in September 2024, reaching 110.82 points at the end of the year. On the other hand, the wage growth rate did not exceed 4.4% during the same period, as the average monthly salaries increased from 5758 Riyale to only 6009 Riyals. Economist Abdel Hamid Al -omari, a member of the Saudi Economics Association, comments on this inequality and says: “If rental increases exceed the growth of wages at major rates, families are put under increasingly living pressure as many are forced to prioritize their prioritize and reduce their other expenses, which even cover the health and even the financial. The health reinforcement increases. Al -omari explains that the main reason since 2019 is gradually lying in the price of land and housing, driven by increasing bank loans to finance property ownership, which led to the transfer of this infection to the rental market. But that’s not all. Majid Aba Al -khail, CEO of the ‘Asil Real Estate’ platform, adds other elements: ‘accelerated population growth, giant projects of Canin, Alla and Al -qadiya, internal and external investment waves … All these factors are increasing on the home stock, especially in major cities. ‘The impact of high rent on the economy and society is not only the effects of this crisis on individuals, but also extends to the local economy in general. With high rents, inflation rates increase, and the purchase power of families drops, which limits spending on goods and services, and affects different economic sectors. Al -omari explains: “When most of the family’s budget is on the way to rent, the ability to save or invest, which in turn reduces capital flow within the economy. Even companies suffer from high rental costs, which are reflected in the prices of their services and increase inflationary pressure.” Aba Al -khail believes that high rent not only affects consumer spending but also reduces the ability of families to save and invest in long -term assets such as buying homes, which deepen the crisis. “If the family spends most of its income on rent, savings for buying a home or investing in real estate, which keeps a large percentage of the population in the permanent rental circle. This reality weakens the financial stability of families and reduces the ability of individuals to achieve residential independence.” Are there solutions to alleviate the crisis? Aba Al -khail believes that the solution may be partly in the private sector. He explains: “The private sector needs more incentives to invest in building affordable housing units. Motivation of real estate developers to create projects aimed at the middle and low income class can help resolve part of the problem, and to provide financing facilities for this group of developers can contribute to raising housing.” ABA Al -khail emphasizes: “The government can intervene by introducing legitimate controls to reduce random increases in rent, and motivate the private sector to invest in housing projects targeting medium and limited income groups. The provision of financing facilities for real estate developers may contribute to the raising of the offer and gradually reducing the offering.” As far as Al -omari is concerned, he believes that the solutions start providing accurate and transparent data on the property market and rent, so that the competent authorities can diagnose the problem and develop effective policies to address it. “If we know the amount of demand and supply in each city, we can make decisions based on accurate data and not speculate or promote false information by the high prices beneficiaries,” according to Al -Omari. He also considered the lack of data available for statistics by the general authority that the absence of detailed information on the distribution of dwelling units, the percentage of vacancies and the average rent in different regions makes it difficult to develop effective solutions to the crisis. Look at the future: Did the rent decrease? Despite the continued crisis, there is cautious optimism that government measures and housing programs such as “residential” can contribute to reducing excessive price increases. With the expansion of housing projects and raising units, the market could be a kind of balance in the coming years. But until then, the biggest question remains: Can Saudi families rise more in the light of the limited wages grow? Khaled and other citizens hope they will find an answer soon before the dream of stable housing becomes far -reaching.