Home rents ‘to rise this year’

Updated 13 June 2015
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Home rents ‘to rise this year’

JEDDAH: Rents for houses and apartments are set to rise over the next six months, with stability likely only in 2017 when the government’s units come onto the market, a local expert said recently.

“Given the effect of the 30 percent mortgage law and our analysis of the rental market in Q1, which saw rents increase across the residential market, specifically for apartments, we expect that rents will continue to rise over the remaining six months of 2015,” said Jamil Ghaznawi, national director and country head of Jones Lang LaSalle in the Kingdom.
Ghaznawi said the scheduled completion of 15,000 units by the Housing Ministry in 2017 would substantially increase supply of affordable housing for ownership in Jeddah. This would reduce demand for rental stock and consequently stabilize or see a drop in prices, he said.
However, he said this would depend on the ministry delivering these units.
“We expect that there will be delays in the delivery of the majority of those units as the three developments in Jeddah are still in the early phases of construction,” he said.
Ghaznawi said that if the ministry brings these units onto the market gradually, which is expected, and the effects of the 30 percent mortgage law continue, then rents would likely increase in the short term and stabilize by 2017, he said.
Offering a different view, Abdullah Al-Ahmari, chairman of the real estate appraisal committee at the Jeddah Chamber of Commerce and Industry, said there was a large supply of housing units for rent, which indicated that prices would fall.
“We expect rents to fall by 15 percent gradually over the next two years. If the Ministry of Housing hands over more than 15,000 housing units for citizens as per schedule by 2017, the rents in Jeddah would fall at a greater pace,” Al-Ahmari said.
He said the government plans to rein in arbitrary rent increases with several measures, including plans to introduce a standard rent contract.
Residential stock in Jeddah stood at around 775,000 units with around 6,000 units completed during the first quarter this year. Sale prices have increased at a lower rate during the first quarter, according to Jones Lang LaSalle’s Jeddah Residential Market Overview.
Rents have risen 7.5 percent more than sale prices in the apartment sector, reflecting the benefit to this sector from the new mortgage regulations.
Residential transactions registered by the government have substantially decreased over the last quarter as a result of the 30 percent mortgage law and falling oil prices.
Sales of villas and apartments have dropped by 59 percent and 27 percent respectively since the implementation of the mortgage regulations in November 2014.


MiSK, Qiddiya team up for internship program 

Updated 15 min 41 sec ago
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MiSK, Qiddiya team up for internship program 

  • Interns will work on entertainment mega-project
  • Program open to university seniors and new graduates

RIYADH: A new internship program for young Saudis has been launched in the Kingdom, following a partnership between Misk Foundation and the Qiddiya Investment Company (QIC).

The program runs from June 16 to Aug. 31, 2019, and provides an opportunity for university seniors and recent graduates to be part of Qiddiya, an entertainment mega-project located 40 minutes from Riyadh.

Interns will have the chance to work at Qiddiya’s corporate offices alongside professionals from around the world and will be placed across 12 departments.

They will learn and develop skills that are required to succeed in their professional lives.

They will also gain exposure to QIC’s culture and learn from executives with over 20 years of experience across several sectors. 

QIC CEO Mike Reininger said: “We are contributing directly to the Saudi Vision (2030 reform plan) by creating a richer lifestyle for Saudi citizens while spurring innovation in the creative, hospitality and entertainment sectors. This unique opportunity allows students and fresh graduates to experience what it takes to be part of the change in Saudi by giving them the chance to work alongside a group of both local and international seasoned professionals. Thanks to this partnership with MiSK, we will be training the next generation of industry leaders.” 

Application to the program is open for those with fewer than two years of professional experience. Candidates must show strong academic credentials and submit a short video as part of their application.

King Salman led the Qiddiya ground-breaking ceremony in front of a global audience last April.

The project is aimed at helping to stem the $30 billion a year which Saudis currently spend abroad on tourism, and has the backing of the Kingdom’s Public Investment Fund.

It targets local, regional and international tourists and will be Saudi Arabia’s preeminent entertainment, sports and cultural destination.

It is expected to be the world’s largest entertainment city by 2030, with a total area of 334 square kilometers, surpassing Walt Disney World in Florida, which is only 110 sq. km.