Experts in the field of real estate and economists have urged the Ministry of Housing to play a proactive role to check rising housing prices and rentals and sought its urgent intervention in providing affordable housing for citizens.

Stating that the rental levels were determined by market forces and demand and supply, they said the current trend was tilted toward the demand side. And there are no laws to prevent real estate investors from pushing up prices, though at times it is exaggerated, they pointed out.

Hussein Al-Mushayt, a real estate planning consultant in the private sector, said one can’t expect solutions to the housing crisis in the short term since the ministry has said it would take two years for construction projects to commence.

Al-Mushayt said developers and real estate investors look for profits in the first place. “Although profit margins should be around 15 percent, unfortunately developers are not satisfied with anything less than 30 percent in profits,” he said.

“The demand from citizens with middle to limited income income has touched one million units, and the shortage in housing units represents a big challenge to both the ministry and developers,” he explained, adding that the private sector managed to provide only 80,000 housing units in the last two years.

He said the average income of Saudi households is low compared to living standards in the country. “The proportion of Saudi households with a monthly income of less than SR4,000 is pegged at 17.7 percent of the total population, while those with less than SR7,000 account for 50 percent. Saudi households with more than SR12,000 account for 15.8 percent and households with an income of more than SR15,000 is 12 percent, according to a recent field survey,” he said.

The main challenges that developers are faced with, he said, are the shortage in labor force, high prices of lands connected with water and electricity utilities and the high prices of building materials. “All these factors led to the slowdown of construction works, and the consequent rise in the prices of housing units,” he added.

He said the shortage in the basic materials for building led to the high demand for cement and iron.

Tareq Koshok, economics professor at King Abdul Aziz University, holding the poor supervision and control of the Housing Ministry responsible for the rising prices of housing units, said: “The Ministry should take strong measures to provide housing. It should consider buying housing complexes from the private sector and offer it at affordable prices to citizens.”

Said Al-Ghamdi, a landlord who owns several buildings and housing units, said prices are subject to the forces of demand and supply in the market.