Recent statistics show that the majority of Riyadh residents rent their homes and apartments. The sad reality is that many Saudi families don’t have the income to buy property. People who can set aside half of their income would need thirty years to have enough money to buy an average family home in Riyadh. One would need a million riyals for the land and the construction expenses to build a modest family home in the Saudi capital.
A Saudi in Riyadh who earns SR10,000 a month (about four times the national average) would find very little left after paying rent and family expenses at the end of every month. There are Saudis, I know, who made SR20,000 a month — a great salary — but retired without having any home of their own.
Very few Saudis actually fit the stereotype of being born rich and in a privileged environment. Most work to meet their expenses. What we need is to help these people secure decent mortgages. Banks in the Kingdom don’t give out 30-year mortgages like they do in the UK and the United States. The fees that banks charge for these loans are high by Gulf standards, and even by the standards of some international banks.
A young man in the United States can start his career at the age of 18. He works while studying in a college. Very few Americans are so-called “trust-fund babies” living off their family’s wealth. Part of this is the American ethic of independence and personal responsibility, which has benefited American society greatly by creating one generation after another striking out on their own, being innovative, resourceful and creative. Many Americans by the time they’re in their 30s can afford to obtain a mortgage and buy property. The financial system is in place in the US that allows for banks to give out 30-year loans at very low rates.
I do not understand why banks in Saudi Arabia cannot develop a similar system. Instead, banks simply refuse to adopt a publicly accessible mortgage system while, at the same time, always increasing their fees. We should hope that our banks contribute to developing this country and its institutions to support and serve the society and its citizens.
