Expats struggle to find housing in compounds

Expats are struggling to find apartments or villas in compounds due to high demand and a lack of available vacancies. The Saudi accommodation market is very tight especially for professional foreign expats. Most expats, and especially westerners, prefer to live in compounds where the level of security and freedom is high.
The housing shortage is critical in Riyadh and Jeddah, where rents have shot up during the past five years. Even when expats can afford the high cost of compound’s apartments and villas, there is no availability.
Real estate developers have told Arab News that the demand for compounds has continuously increased as the economy continues to grow, while builders are still not keen on building compound complexes.
“Expatriates moving to Riyadh face long waiting lists for a place in a residential compound,” said John Harris, regional director of Jones Lang LaSalle, Saudi Arabia.
Nevertheless, with rents rising to SR 250,000 a year for a three-bedroom villa and SR 100,000 a year for a two-bedroom apartment, property developers expect a booming market, with several large new projects becoming available by 2015.
The latest reports and statistics show that compound availability in Riyadh would increase by 50 percent in the next two years.
“Such an increase in the number of residential units will slow down rent hikes,” he said.
According to Harris, the price of compound housing has consistently shot up by 10 percent a year over the past five years due to high demand and low supply.
Harris expects to see around 3,000 new residential units by 2014 and thinks this will reduce housing pressure on the market.
“We are not sure whether the new compounds will cover the continuous high demand. We expect rents to settle at around SR 200,000. The majority of the market can afford these high rents, as companies usually pay rent for their expat employees,” said Harris. “I believe the demand in Riyadh is much higher than it is in Jeddah and Alkhobar due to the large number of construction, health care and infrastructure projects in Riyadh,” he said.
“I don’t see any growth in the number of residential units in Jeddah because the availability of land there is limited.”
Expats still face challenges in acquiring housing for rent despite the fact that there is a decent number of compounds in the main Saudi cities Riyadh, Jeddah and Alkhobar.
The number of compounds in Riyadh stands at 32, with 29 in Jeddah and 13 in Alkhobar. The capacity of these compounds varies between 150 and 400 residential units, including villas and apartments. All compounds are currently fully occupied. Arab News has learned that a tenant must potentially wait for more than eight months for an apartment that costs less than SR 100,000 a year. For apartments exceeding SR 150,000 annually, the wait is about six months.
Chris Khoury, a Lebanese marketing employee who has been living in Jeddah for the past five years, said that living in a compound helped her to get in touch with other expats who share a similar lifestyle and mentality.
“I was in London for 10 years before moving to Jeddah. My kids and husband used to love the lifestyle there. It was strange for us to adapt to the new lifestyle in Saudi Arabia. When we arrived five years ago, we were unable to find a suitable compound apartment. We ended up renting an apartment in the Al-Rawdah district. Spending one year in a normal apartment was difficult for several reasons,” she said.
“We didn’t know anyone and couldn’t interact with neighbors. The lack of mobility became a large impediment for my kids and myself. In short, we were miserable until we moved into a compound two years ago,” she added.
Living in a compound has several advantages. The compound usually provides buses for shopping and school transportation. Women are allowed to walk around without wearing the 'abaya' (cloak) inside the compound. There are swimming pools, tennis courts, basketball courts and gyms, with some compounds even offering a golf course.