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04-09-12

Saudi home rentals increase in H1

(MENAFN) A recent report released by property consultant CBRE showed that residential rentals in Saudi Arabia continued to increase during the first half of 2012, Saudi Gazette reported. According to the report, villas rentals increased an annual 10 percent during the first six months of the year, while rental rates for apartments have jumped nearly 15 percent annually. Compound occupancy and rental rates also increased, driven by higher employment for middle and upper-income expatriates and lack of fresh home supply compared to the accelerating demand. Improved road links and infrastructure paved the way for new residential areas, particularly those areas where land is less expensive than the more central areas targeted by land price speculators, the report added. The report noticed that overall apartment sales continued to be weak as Saudi nationals prefer villas over storey-residential units. Quality housing remained a pressing issue in Saudi Arabia, developers face challenges of the contradictions between demand, the ability of Saudis to purchase housing and the mismatch between expectations and reality in terms of scale and quality, the report pointed out. This is partly driven by the absence of a secondary housing market, which means that a Saudi national's first purchased home is likely to be the only home they ever purchase, the report stated. The issue of build quality is key with traditional building techniques and quality leaving houses virtually obsolete over a 30 year period, CBRE explained.

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