Real estate experts and businessmen have unanimously agreed that allowing owners of residential buildings to add an extra floor to existing structures will help alleviate the city’s housing shortage and bring down rents.
Awad Al-Zahrani, head of the Real Estate Committee at the Jeddah Chamber of Commerce and Industry, is confident that the additional units will compensate for the shortage of new residential buildings. He pointed to three housing projects in South Jeddah and a major project in the North as welcome additions to the local housing stock.
Nonetheless, he called on authorities and the municipality to construct buildings with multiple levels in North Jeddah to the Thahbad area, “If all residential buildings were allowed to add one more floor instead of the current practice of only allowing select buildings in certain neighborhoods to do so, it would flood the market with additional housing units and reduce rents by 30 percent,” he said.
Adeeb Idrees, a real estate investor in Makkah, said that the market in Makkah is buoyant after the municipality’s decision. He said, “Building owners and small real estate investors are really happy because it is a less costly exercise to add another floor . It also solves the problems caused by mass demolitions due to the expansion of the grand mosque.”
Idrees said he expects more than 35,000 housing units to enter the market if construction continues at current levels.
He also expects the rents to go down once these units become available. In the past five years, rents have increased by 100 percent all over the Kingdom – especially in Makkah.