The soaring prices of properties, houses and rents in Jeddah are being attributed to the mushrooming of random real estate offices, which take huge commissions on their services.

The random offices which employ brokers to seal deals confuse the real estate markets owing to non-compliance with the standards that define rents and property ownership.

Housing units in the same area of the city can have varying prices because the owner has given his authorization for the transaction to more than one office.

“Although there is an increasing demand for residential units, the more than 20,000 people employed in the real estate sector don’t have the slightest idea about the needs of the real estate market,” Talal Samarkandi, chairman of the real estate committee at Jeddah Chamber of Commerce and Industry (JCCI), said.

Speaking to Arab News he said: “I don’t think there will be a major reduction in rent prices because there are no binding decisions compelling owners to do so.”

Abdullah Al-Ahmari, head of the real estate appraisal committee at JCCI, said owners of random real estate offices have indirectly contributed to raising land prices, which in turn led to the high prices of residential units. Al-Ahmari blamed unregulated real estate offices for marketing properties without original title deeds among several citizens.

“These offices resort to illegal and unethical practices with an eye on earning huge profits in real estate transactions. They are also responsible for many land encroachments,” he said.

Al-Ahmari said the chamber committee has called on the Jeddah Municipality to work in cooperation with the ministry and refuse to give licenses to real estate offices without commercial registration.

Referring to the illegal real estate offices in Jeddah, Al-Ahmari said most of these are operating on the outskirts of the city, in unlicensed real estate buildings or in uninhabited areas.

“On the other hand, licensed real estate offices operate at facilities authorized by the municipality,” he added.