20,000 unlicensed brokers to blame for rent increase

Real estate experts say that the “Rent Network” project launched by the Ministry of Housing in the middle of this year will have a significant impact on reducing random office properties operating without licenses, especially in light of the 20,000 real estate offices that exist and operate.
They said that more than 5,000 licenses were issued for real estate offices in the Kingdom, stressing that random real estate offices are one of the most important reasons behind the unjustified rise of house prices.
The aim of the “Rent Network ” project is to link all real estate offices to an electronic network in order to organize the real estate market, control prices and empower citizens to search from a wide range of houses that are for rent, according to his specifications, such as location, space and services, amongst other elements.
It also allows the tenant to get the best offers. The system will link the person through connecting rent offices with a special network technique that can obtain detailed information about tenants, such as their credit history in terms of payment of rent or defaults, the time of payment (whether monthly, half yearly or annually) in accordance with what has been agreed upon between the lessor and the lessee. This will be done with the coordination of the Saudi Arabian Monetary Agency and other stakeholders.
The Minister of Housing, Dr. Shuwaish Al-Duwaih, earlier confirmed that the draft of the “rent” system, which regulates the rental market and real estate offices in the Kingdom through the establishment of a big electronic network, will help in reducing rent prices in the Kingdom, given that it will lead to increased investments in the field of housing units and thus increase supply against demand.
“The goal of the project is the careful regulation of the sector to control rental prices accurately and to monitor annual increases as well. It enables us to compare these rents with rents worldwide so that we can make decisions in the best interests of citizens,” said Al-Duwaih.
“Random office properties are the main reasons behind high housing prices and rents. This helps in increasing demand for residential units. At the same time, there are more than 20,000 people working in the real estate sector who don’t have the slightest idea about the needs of the real estate market,” said Talal Samarkandi, chairman of the Real Estate Committee at Jeddah Chamber of Commerce and Industry, while speaking to Arab News.
“Personally, I don’t think that the project will help in directly reducing rent prices because there are no binding decisions in this regard that compel owners not to raise prices for an obvious reason,” he said.
Random office properties confuse real estate markets because of the lack of standards that define rents and property ownership against the increasing influence of brokers in these offices. As a result, the price of a residential unit in the same area varies because the owner gives his authorization for the transaction to more than one office.
Abdullah Al-Ahmari, head of the Real Estate Appraisal Committee at JCCI, said that owners of random office properties indirectly contributed to raising land prices, which in turn led to the high prices of residential units.