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DAMMAM: It seems that an overwhelming majority of Saudi citizens have abandoned their dreams of owning houses or villas following increases in real estate prices in the Kingdom.

And this has prompted many to purchase apartments instead, a trend that is more noticeable among people with limited incomes, according to a report in Al-Eqtisadiah newspaper.

The Kingdom has been witnessing an economic boom thanks to the surge in oil prices and huge inflow of foreign capital over the past few years.  This has led to a strong recovery in the construction industry, which in turn resulted in an increase in the price of real estate thus dashing hopes of a large number of low- and middle-income people to own houses. Such people are now turning to buy residential apartments that are being offered for sale on a lease-to-own basis.

Mohamed Yaseen Bukhamseen, a member of the real estate committee at the Eastern Province Chamber of Commerce and Industry, said the price rise is not restricted to the real estate sector alone.

“Several other sectors have also been affected by this and ordinary citizens are the major victims. The huge increase in the price of real estate has put these people into a situation that leaves them unable to fulfill their dream of possessing a house of their own,” he said, while drawing attention to the huge rise in the price of real estate in the Eastern Province.

According to Bukhamseen, this is not the result of competition among realtors who entered this sector to cash in on the construction boom alone. “This is only one factor. The major reason for the price rise is the impact of the global economic situation. The global price rise has affected various sectors, including real estate,” he said.

“There has been a situation in which even people who earn more than what middle-income people earn are not in a position to build a house or villa of their own. They therefore turn to buying apartments in accordance to their financial position, and the availability of loans from banks and other financial institutions,” he pointed out.

Bukhamseen said the Real Estate Development Fund has played a vital role in helping a large number of citizens build homes by providing housing loans during the past 20 years. “However, taking into account the huge rise in the price of land and construction materials, the loan from the fund will not even be sufficient to buy land,” he said.

He further called on the authorities to find a solution to the problem. He also underlined the need to take measures to closely monitor the prices of building materials and take punitive measures against traders who recklessly increase prices.

Muhammad Al-Khaleel, a member of the real estate committee at Riyadh Chamber of Commerce and Industry, said there is a trend among people, especially those with limited income, to own their own apartments rather than building houses. He also said this is healthy.

“Many people who are unable to afford purchasing their own land and construct houses can easily own flats by paying the price in installments. This would resolve the housing problem to a great extent as a major segment of the public are unable to buy land, especially in cities,” he said, adding that they could also earn profit by selling in the future.

Bukhamseen also noted that the emergence of several real estate companies that are engaged in building residential apartments in various regions of the Kingdom would substantially contribute to resolving the housing problem.

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