The exodus of expatriate workers from Saudi Arabia has negatively affected the country’s real estate sector with a considerable fall in rent prices.
Many property owners were forced to reduce their rents to attract clients and ensure liquidity. Market analysts expect further falls in prices in the coming months.
According to the General Authority of Statistics (GaStat), 234,200 expatriate workers have left the Kingdom in the first quarter of this year. This is in addition to 466,000 foreigners who left the country in 2017, which brings the total number of expatriates who left the Kingdom over the past 15 months to 700,200.
Khaled Barasheed, former chairman of the real estate committee at Asharqia Chamber, said the fall in real estate prices in remote areas reached 25 percent while in cities the percentage was a little less. The demand for real estate properties has decreased compared to previous years.
“People have postponed their plans to purchase houses and other properties expecting the prices to fall further,” said Barasheed while speaking to Makkah Arabic daily.
Ali Al-Jibali, former vice chairman of the real estate committee at Asharqia Chamber, said the depression in the property market was not limited to the Eastern Province alone but covered all regions of the country. He attributed the fall to a global economic downturn.
He called for greater partnership between the Housing Ministry and real estate developers to boost the market by constructing more houses to meet people’s requirements.
Developer Mohammed Al-Yazidi said about 1.5 million Saudis were waiting for new housing products, adding that it would require greater partnership between developers and contractors.
Abdullah Al-Damigh, an investor in the sector, said property rents declined as a result of the departure of a large number of expatriate families from the Kingdom especially after the imposition of the dependent levy and companies cutting down the number of foreign workers due to increased costs of hiring and tough conditions set by the Labor Ministry.