Saudi Arabia’s real estate sector is flourishing. This is nothing new. The trend began in 2001 with the repatriation of funds after the 9/11 attacks in the United States. Now, with the Saudi economy robust due to oil price rises, it seems that there is no end in sight to the construction boom. This is a good thing. The Kingdom’s rising population needs to be housed, meaning that public and private sector developers must build tens of thousands of residential units a year to meet demand.
In the Eastern Province, as elsewhere in Saudi Arabia, a large number of real estate investment and housing projects are under way. Al-Hammad Co & Partners for Real Estate Development and Investment has begun projects worth over SR500 million, covering an area of 4 million square meters in the Eastern Region. Rikaz Development, a subsidiary of HAK Group, is busy too. Its Fanar City Project, along a man-made lagoon on the Gulf coast, covers an area of 3.3 million square meters. Aloula Development Company is also a strong player in the Eastern Province real estate market with its total investments thus far above SR4 billion.
Now before everyone gets too excited, it must be pointed out that these huge construction projects are not really as beneficial to the Saudi economy as they could be and in some ways there is the potential for enormous harm to local consumers. I have a bit of experience in home construction, having built two homes previously, and this spring my family bought a new home in the Eastern Province. We never imagined that such a step would unleash a torrent of misery.
The first thing that we noticed about our house was that except for the manager of the company which built the property and the bankers who gave us the mortgage, there were no Saudis connected in any way with the building’s construction, finishing, sales or warranty. We were shocked to discover that our house was basically built by an international team of poorly paid laborers who could scarcely understand each other and who had no incentive to see that their job was well done. This was apparent when we did a quality check on the home’s construction before we moved in. A 30-page document of defective building items was the result of our investigation. My family was fortunate to have found all the problems now, as the repairs were made on the contractor’s expense. However, it was recently brought to our attention that our neighbors in the housing development have not been as astute. The houses in this development have just a one-year warranty, after which time the developer will only be liable for serious structural defects. It should be noted that homes in many Saudi housing developments come with no warranty at all.
We also discovered that the contractor bargained hard with the suppliers of finishing items for the house. On everything from sink stoppers to paint, there was definitely a quest to extract the lowest possible price from local traders. This led to us immediately replacing a truckload of items from doorknobs to window security grills in order to raise the usability standard of the house. In the mind of the contractor the finishing items on the house only had to last a year, till the warranty ended. Quality wasn’t the contracting company’s motivation. Price was.
Some policies of the developer were heinous. Our home’s kitchen was only equipped by the developer with half the needed cabinets. When we went to the supplier of the cabinets, Al-Joaib Furniture Factory, to purchase the missing, matching half, we were faced with a quandary. Al-Joaib demanded over SR11,000 for the remaining cabinets. The Al-Joaib cabinets already installed in our home were poorly finished and an unattractive color. We could take a complete and larger set of aluminum kitchen cabinets for less than SR11,000. We could also buy beautiful Swedish kitchen cabinets from Ikea that held a warranty for ten years. In both the latter scenarios, we’d have to throw away the installed cabinets. My husband begged me to do the Ikea cabinets.
In the end, I was a complete idiot. I told my husband that we shouldn’t waste the kitchen cabinets already in the house and that we must support Saudi industries. We ended up with an ugly kitchen from Al-Joaib that was not only overpriced, but took more than a week to install. Even worse, throughout the entire process of setting up the cabinets, from design right through to installation, not one Saudi was involved. So my whole concept of supporting local industry was in error. For my stupidity, I need to apologize to both my husband and Ikea’s Dr. Ghassan Al-Sulaiman, who employs many Saudi in his operations.
In fact, there has been so much contractor grief while getting this house up and running that an entire book could be written about this ugly experience. Not one thing that was to be installed in our home was delivered or installed on time. Nothing that we requested from a local contractor has been done according to the agreed upon design — not cabinets, not protective steel, not doors, not window blinds — nothing at all is how we’ve requested it. The worst thing about dealing with local home furnishing contractors in the Kingdom though is that consumers have no recourse when the work is done poorly or not at all.
Every contractor we dealt with demanded at least 50 percent payment at the time the work order was signed. The rest of the money had to be paid before the furnishings would be installed. When the work didn’t meet our specifications in regards to quality or delivery, the contractors just laughed at our complaints. “You’re too picky,” and “What’s the hurry?” were their standard lines. With no consumer protection agency or Better Business Bureau to turn too, we were always at a disadvantage.
In the midst of the contractor terror I frequently watched my husband turn red in the face. The vein in his temple would be throbbing. His fists clenched, his voice tight with anger, my dear spouse appeared to be on the verge of metamorphosing into some sort of monster. At those moments I often wished I’d married a werewolf. I do believe that fangs would have been a much better tool of persuasion in dealing with local contractors than our pitiful begging and pleading ever were.