MADINAH, 29 July 2004 — Property prices and building rentals have gone up dramatically near the Al-Enabeya area east of the Prophet’s Mosque where development work is under way.
The price boom is driving many long-term shopkeepers out of the area, Al-Madinah reported.
The paper noted that the central area surrounding the Prophet’s Mosque is the most important part of this holy city. Hundred of thousands of people visit Madinah every year and many pass through the area at some time or other during their visit. The ongoing municipal projects aim to meet the needs of these visitors.
Al-Madinah interviewed a number of shopkeepers in the area to assess the commercial impact of these projects.
Abdullah Al-Shihri has a store in the area north of the holy mosque. “These development projects have caused the rent to rise dramatically,” he said.
Once it was SR20,000 a year, but now, because of these projects, he pays SR70,000. “I cannot find a good explanation for this price boom,” he said.
“This increase in rentals will only harm young Saudis like me who are looking to start their own business,” Saad Al-Enaizi.
He does not have a large capital to start business.
“I cannot open a store in the area close to the holy mosque. These price increases are standing as a barrier in front of my dream,” said Al-Enaizi.
Khaled Al-Amoudi said business was good in the olden days. “Profit increased and I was looking forward to opening another store and expand my business. But because of the sudden price increase in renting stores, I gave up on the idea.”
He can no longer afford to open a new one and can hardly pay for his current one. His good advice to young Saudis who want to start a new business is to stay away from the central area unless they have large capital.
“If you want to buy a store in that area, you would have to pay double the normal amount, which is impossible for young businessmen,” Al-Amoudi said.
A source at Madinah Municipality said the price increase is normal and it is good for the area. “It is impossible for the municipality to make a step forward if it harms the public,” he said.
Owners of property around the central area welcome the price rise and hope that the prices would remain at current level if not higher.
Ahmad Al-Ahmadi, a storeowner in the central area, said that the area is a prime target for investors.
“I managed to hold on to the store that I own despite the good offers that I received. Many people blamed me for not selling the store when the first offer arrived. I waited until I received an offer that I could not resist. I sold my store, which is just 12 square meters for SR1.5 million,” said Al-Ahmadi.
