10 April 2009

JEDDAH: Faisal Abu Ahmed, a 34-year-old Saudi father of three, who has been married for 15 years, says he has built a successful family. But regrets that despite having worked in a good position at a local marketing firm he is yet to be able to purchase land or even buy a home for his family.

“I feel like a hamster on a wheel, running and running but never getting anywhere,” Abu Ahmed said. “No matter how much I try to budget or save money I can never get close to the amount needed to purchase a house or buy a plot of land.”

He said he is reluctant to take loan because of the current job market situation. Abu Ahmed said that even though he has shown loyalty to the company he works for, he is apprehensive that something might go wrong. He said he has recently seen as many as 12 people at the firm laid off.

According to recent statistics cited by the Saudi Press Agency, as many as four out of every five Saudis are in the same predicament — blaming a lack of job security and rising costs of living as the main factors preventing them from becoming homeowners.

The March 2009 Consumer Confidence Report compiled by YouGovSiraj and Bayt.com shows that from November 2008 through February 2009 the Employment Confidence Index (ECI) in Saudi Arabia declined with 42 percent among the 1,312 people surveyed saying they feel business conditions were worse while another 42 percent said their job positions had weakened.

The same report said that 63 percent of Saudis believe the current salary structure has failed to match the cost of living. When asked about their future job market expectations, 36 percent of the 1,175 people polled said it would get worse, 26 percent said it would get better while the rest believed it would remain the same.

When asked if they were planning to purchase a house over the next 12 months, 58 percent said they won’t be able to do so, 24 percent said yes, while the rest said they were not sure.

“I honestly believe that the majority of the population are living paycheck to paycheck despite reports that the local economy is healthy and that the Kingdom is the least affected country in the GCC,” Abu Ahmed continued.

Agreeing with Abu Ahmed, 32-year-old Hatem Abdelrazak said he has not been able to get married due to the high cost of living and rising expenses.

“I have been working as an office employee in a construction company for the past eight years and have yet to be confirmed as a full-time employee due to internal budgeting issues. I have tried to find jobs in management positions in other companies that advertise that Saudis are preferred. But, in fact, these jobs are being given to foreigners who are drawing monthly salaries of between 20,000 and 40,000 riyals forcing people like me to continue with temporary employment.”

Due to the rising population the government has been pressed with the responsibility of developing 4.5 million new housing units within the next five years. As a result, the Ministry of Justice has been working on a mortgage law to help low-income families to be able to purchase a home through a monthly payment scheme.

However, this too has come under scrutiny. Shoura Council member Abdulrahman Al-Zamil, speaking to Al Madinah Arabic daily, was quoted as saying that the new mortgage law would not benefit 85 percent of the Saudi population whose monthly salaries are under SR5,000.

“It will benefit large real estate firms, investors, and the middle class,” he said.

Commenting on the issue Abdelrazak said he thought the assistance the government could give is to start a subsidy program for nationals who are in need and who meet certain criteria. “I feel this would be one solution which would benefit a large portion of the population who can’t afford to own their own homes. In cases like mine, it would help people to build their own families,” he said. “After all, isn’t shelter a basic necessity of life,” Abdelrazak asked.