As new infrastructure rapidly replaces the old buildings in Saudi Arabia’s traditional neighborhoods, experts are increasingly worried that the boost in the real estate market could put the existing construction at risk.

Construction experts estimate a 30 percent increase in new buildings, responding to a decision allowing a building to reach the maximum level of six stories rather than the current three.

This decision has encouraged investors to demolish old buildings replacing them with additional housing units. A source at the Ministry for Municipal and Rural Affairs said buildings have increased by 300 percent in the last decade. “The number of permits has risen from 37,585 to 112,362 in the past 10 years or so,” the source said.

Financial Specialist and CEO of Financial Transaction House, Faisal Al-Sayrafi explained that this phenomenon has happened in the past five years, especially in the cities’ traditional neighborhoods and is expected to continue despite the high costs of the real estate market.

Statistics show that 60 percent of Saudis don’t own homes. Apartments are an option for limited and medium-income citizens who can’t afford to build houses on private land. It’s believed that due to the expansion, a unit’s price will increase by 40 percent.

“The Jeddah mayoralty registered 14,476 building licenses,” said Yaser Adas, director of building codes and licenses at the Jeddah Municipality.

The Riyadh Municipality registered 27,000 units in 2012 in comparison with 20,013 licenses in 2010. Both cities reached a 30 percent increase from the previous year.

About 60 percent of new buildings have replaced the old infrastructure as part of the construction movement in the Kingdom. The construction is focused in the north of Jeddah such as Faisaliah, Bawadi, Safa, Aziziyah, Salam and others districts, says Abdullah Al Balawi, owner of a real estate office. However, the new trend doesn’t come without risks.

Real Estate expert Abdullah Al-Ahmari has warned of the effects of the increasing numbers of apartments and residents on the infrastructure in these areas. Most of the replacement boom is taking place in the traditional areas leading experts to believe that the basic infrastructure built 20 to 30 years ago in these areas might not endure the larger developments.

Al-Ahmari said municipalities need to reconsider the decision and move the residential density to the new planned areas that have better infrastructure. Al-Ahmari said cheaper land prices in traditional neighborhoods encourage investors to build there instead of the planned areas where land costs 60 percent of the estate’s price.