Saudis, citizens of one of the world’s wealthiest nations, are struggling to afford housing in a crisis spurred by urbanisation and a lack of competition in real estate.
Less than 40 percent of Saudis are homeowners, and demand continues to outstrip supply in the property market, driving up prices and leaving low- and middle-income families with few options to buy or even rent.
A recent study by the construction and real estate conglomerate Binladin Group said the oil-rich Gulf kingdom needs one million new housing units over the next five years.
In March, King Abdullah ordered 500,000 housing units to be built within five years and set aside $66 billion for the project, but the International Monetary Fund said last month that more needs to be done.
“To address the affordability of housing, mitigate the land prices, and increase the supply of land…the government must unlock the static supply of land,” the IMF said in a report.
At the core of the problem, analysts say, are the ultra-wealthy who own massive swathes of land in major cities and on their outskirts but do nothing with it.
In Saudi, these landowners are so notorious the people have given them a nickname — the Hawameer or in English Gropers — after the widely eaten and very large fish that inhabits the seas of the Arabian Gulf.
In the words of Saudi economist Issam al-Zamel, “this monopoly over land has led to a bottleneck in the housing market where the properties are fee free and they increase in value exponentially.”
Zamel added that unless some form of tax is levied on the landowners, the crisis will continue, since for now, there is little incentive for owners to develop properties, or even to sell unless it is to high bidders.
“Rather than build a factory, a housing project, or a school, these lands are bought en masse and then left for years untouched, their value increasing at no loss or effort to the owners,” he said.
Further compounding the problem is rapid urbanisation and a “youth bulge” that the Arab Human Development Report says poses a challenge to the ability of regional governments to provide basic services to the population.
In Saudi Arabia, more than 50 percent of the population is 24 or under, and the urban population has soared to just over 82 percent in 2010 from about 48 percent in 1970, according to the research paper.
The IMF report concurs.
“Demographic factors and bottlenecks in the real estate market…and continued urbanisation have sharply increased demand for housing in recent years,” it said, adding new housing needs in the kingdom between 2010 and 2014 are estimated at 1.25 million units.
On September 14, film-maker Bader Hammoud posted a 22-minute black comedy on YouTube portraying the difficulties Saudi youths are facing in finding affordable housing.
The video has gone viral with more than 1.2 million hits.
The film, entitled “Monopoly”, depicts the lives of seven young Saudi men who have resorted to extreme measures to find a place to rest their heads at night.
The main character, Mohammed Qahtani, lives in his van parked by a beach road and it starts with him boasting sarcastically, “You tell me, who in Saudi can afford to live by the sea?”
Qahtani uses sea water to wash up, and makes breakfast on a camp fire on the side of the road as the narrator describes him as the “first Saudi to own his own home in the new millennium.”
Five other characters, all highly educated and employed professionals, share a one-room apartment with a single bathroom and small kitchen no bigger than 20 square metres (215 square feet).
At one point in the film, Qahtani is seen running from vicious looking landowners on a vast and fenced off desert field. They finally catch up, biting him and barking like wild dogs.
Qahtani then wakes up from his nightmare.
By the end of the 22-minute film, the five men pack their bags and move into Qahtani’s van because their landlord raised their rent.
The characters in “Monopoly” are all actors and the movie is fictional, but the story it tells is very real.
Abdullah al-Ahmari, the head of the real estate committee at the chamber of commerce of the Saudi port city of Jeddah, blamed the housing crisis on urban migration but conceded government intervention will force landowners to re-evaluate their investments.
“The housing crisis is a new phenomenon which appeared only in the last 10 years because of people moving to the city in search of work and education,” said Ahmari.
“But the government’s plans to build (new units) and develop the outskirts of the cities will push the landowners to sell at lower prices,” he said.