Anyone who buys lands in the area will not be able to obtain a construction license, it said.
The warning comes as investors went on a spending spree for land in east Jeddah. Buying and selling was eventually banned by the municipality following severe floods and rains in November 2009.
The municipality prevented the buying and selling of land in this area until compensation was approved by a committee set up for this purpose. The committee consists of government representatives, the JCCI and two real estate evaluators.
Worried by the ban, landowners started offering plots at a 30 percent discount.
“Investors were quick to jump in to acquire the land in the hope that they would obtain feasible government compensation,” said one realtor, who chose not to be named.
Chairman of the real estate committee at the JCCI, Abdullah Al-Ahmari, described those who bought land in east Jeddah as “gamblers.” He added that the evaluation committee would not consider the astronomical prices at which investors bought the land but would adopt fair prices according to the real market value.
He pointed out that the owners benefited from a royal decree giving them the right to do whatever they want with their land, but said compensation would only be paid after the municipality has started digging valley passes.
Abdul Raheem Al-Sati, a real estate specialist, said landowners in east Jeddah started selling their plots out of fear that the compensation procedures would be protracted. “This has led to the birth of a special market for the selling and buying of land where transactions have been prevented by the municipality,” he said.
According to Al-Sati, those speculators who bought the banned plots were able to make big profits in a short span of time.
Following the flood disaster, the municipality had imposed a ban on selling and buying land in 68 plots likely to be in valley passes in east Jeddah.
