* Investors are actively looking for land and houses in old neighborhoods to rebuild them! * Old neighborhoods are close to the heart of the city, markets and services and are in demand by expatriates and some Saudis
* The cost of construction is low, demand is high, selling is easy and investment is feasible! * We call on the Municipality to re-plan these neighborhoods and widen their streets to suit Saudi families
* The return on investment in the old neighborhoods is 10% and in the new ones only 7%! * Contractors are cheaper and labor is available and close to home
The majority of families are looking for better housing and cheaper rent
* Prices vary between 650 riyals for a meter of residential land and 3 thousand for commercial
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A new phenomenon that began to spread in the old neighborhoods in Riyadh, monitored by “Amlak”, where it saw an unprecedented crowd of real estate investors on these neighborhoods in search and demand for land and houses to buy, rebuild and invest in rent due to the great demand by large categories and large segments of expatriates families and singles, employees and workers, as well as not a small segment of Saudi families with limited income and some singles from employees in small military jobs or security guards coming from remote places, all looking for low rents that match their incomes. “Amlak met a number of investors and owners of real estate offices in these neighborhoods and talked to them about the details of this phenomenon and its causes. What did they say? This is the result of the dialog...
Close to the heart of the city:
”Amlak“ asked Mr. Bandar Al-Mughaisib, one of the investors in Al-Jaradiyah neighborhood, about the reasons that prompted some investors to move towards establishing new buildings in these old neighborhoods, and most of the answers agreed that these old neighborhoods have become investment feasible now because they are close to the heart of the city, and enjoy the advantages of easy access to most areas of the capital, and are covered by services and facilities, unlike new neighborhoods, and the biggest reason is the low value of land in those neighborhoods, and because rents are cheaper compared to other neighborhoods, demand for rents is greater than others, and for those who want to sell.
But are there any proposals to develop these neighborhoods so that they are suitable for the Saudi family, he answers: I am not a specialist in these matters, as the Riyadh Municipality is sufficient, but I believe that these neighborhoods can be developed by paving, lighting and expanding the streets, widening their entrances, removing dilapidated and old buildings that represent a security risk to their residents, and building new housing units.
<As for the type of tenants living in these neighborhoods, Al-Mughaissib said: As for the largest percentage of the residents of these neighborhoods, are they singles or families, he believes that most of them are families, and this is due to the real estate owners who allocate them to families, due to their high demand for housing, as well as to avoid the issues that may occur from the housing of singles, as for the majority of the nationalities of these neighborhoods, they see that most of them are Saudis, but there are also other nationalities.
As for the majority of the nationalities of these neighborhoods, they see that most of them are Saudis, and there are other nationalities.
Land at 250-300 thousand:
As for the prices of old houses if they are valued as land at the current price, Al-Mughaissib believes that they differ between old houses, some of which are more expensive than the house, and the value of the old villa ranges from 300 to 400 thousand riyals, and the value of the land ranges from 250 to 300 thousand, and there are some houses whose price is between 180 to 250 thousand. We asked about the desired and preferred streets for the consumer and investor in these neighborhoods, and the response was that for the consumer, the internal streets are 15m to 20m wide, while for the investor, the main streets are 60m, 40m, and 30m wide.
<Asked whether the requests to buy land have increased recently, or witnessed an increase in the reconstruction of old buildings, he said that without a doubt the requests from investors for land in these neighborhoods have increased dramatically, as some investors buy land and build, and others buy old houses and rebuild them As for the presence of many abandoned houses in the area and the reasons for their abandonment, he says there are some abandoned houses that have been abandoned by their owners for a long time, neither they rented them, nor sold them, and this is due - in his view - to the owners” desire for high prices, like the prices of some other neighborhoods, and it may be for other commercial reasons.
<As for the work characteristics of most of the residents in this area, Al-Mughaissib says: Most of them are small employees in the government sector, civilian and military, and some of them are employees in the private sector, and whether he thinks that this neighborhood is densely populated, he said: Yes, and the reason is that they are low-income people, sometimes there are more than one family in one residence, and the other and most important reason is the low value of rents compared to other neighborhoods.
The return on investment in old neighborhoods exceeds the new ones! “Amlak” moved to the old Budaiya neighborhood (Al-Qary) and met Mr. Mohammed bin Fahd Abu Nayan, one of the owners of real estate offices in the neighborhood and asked him about the reasons why some investors tend to establish new buildings in those old neighborhoods, he replied that the return on investment here reaches 10%, while in other neighborhoods and northern Riyadh it reaches only 7%, as construction here is silent, and most of them are apartments, while in other neighborhoods it is setbacks. And because it is more income and more economical when building, because the meter in these neighborhoods is much less than high-end neighborhoods, and contractors are cheaper, because labor here is available and close to their housing, and because it is densely populated and most of its residents are foreigners, and most investors do not prefer the Saudi tenant, because the foreigner pays first, and perhaps this is due to the foreigner's fear, while the Saudi does not pay because he knows that there is no system that protects the investor.
<As for his view on how to develop these old neighborhoods to make them suitable for Saudi families, Abu Nayyan said: As for the quality of the tenants, he said that the majority of them are low-income, small jobs, some of them have no job, and most of their nationalities are poor Saudis, and there are other nationalities such as Sudanese, Pakistani, Yemenis and most of them are single people.
About the prices of the old neighborhoods to make them suitable for Saudi families, Abu Nayyan said. <Regarding the prices of old houses if they are valued as land at the current price, Abu Nayan said: For example, a popular house with an area of 90 m to 150 m, its price may reach 200,000 riyals, yet its new owner prefers to demolish it and rebuild it again, as for the land, the price per meter is from 800 to 1000 riyals, and about the desired and preferred streets for the consumer and investor, he said that it is for the investor in these narrow neighborhoods with a street width from 8 m to 10 m. As for the consumer, he has no difference, the important thing is the good price.
As for the consumer, there is no difference between the good price.
Wide demand from investors:
He said that he has recently noticed an increase in requests to buy land and rebuild old buildings unexpectedly, and I know an investor who has been searching in the old neighborhoods for about four months and has not found until now, and he mentioned that most of the residents of this neighborhood are low-ranking military personnel, security guards, and people from the south, and said that this neighborhood is densely populated, but it is less dense than other neighborhoods such as Shamisi or Manfouha, because most foreigners want Shamisi and Manfouha, because it is close to their people and close to the popular markets.
We asked Abu Maktoum to explain the difference between the two neighborhoods. <We asked Abu Nayan about the reasons why some investors go to build new buildings in these old neighborhoods, and he replied by saying: For the availability of services, lower price, randomness, building on silent, as there are no restrictions in construction, because it is considered a popular building, and therefore gives a wide field for the investor, and whether he thinks that tenants are more in this neighborhood than owners answered yes, because the neighborhood began to shift from villas to the system of small economic units, but why investors prefer internal properties nearby in the main streets, and the answer was that these streets are closer to services, and better in terms of security, allowing multiple floors, availability of services, and high returns.
When asked about the possibility of developing these old neighborhoods, Abu Nayan replied About the possibility of developing these neighborhoods to suit the Saudi family, Abu Nayyan said that this can be done by improving services, allowing multiple floors, amending the building system, expanding the streets and rehabilitating them, and about the quality of tenants in the neighborhood, he said that they belong to all nationalities and most of them are Arab nationalities from Egypt and Syria, and as for the prices of old houses if they are valued as land at the current price, he said it is estimated between 800 to 1000 riyals per meter for residential and commercial from 1500 to 2500 meters, and this is controlled by several factors, most importantly the capacity of the street and land area.
As for the prices of old houses if they are valued as land at the current price, he said that they are estimated between 800 to 1000 riyals per meter for residential, while commercial from 1500 to 2500 per meter. He said that the preferred and desirable streets for the consumer and investor in this neighborhood are commercial streets, due to their scarcity because the system serves them with multiple floors, and said that he has recently noticed an increase in requests to buy land and rebuild old buildings in the neighborhood due to the lack of land and the entry of new investors into the market, pointing out that most of the population in the neighborhood are technical workers, and said that the neighborhood is characterized by high population density, due to the availability of services.
Development is possible to meet the needs of the population in the neighborhood.
Development is possible to suit the Saudis:
As for the reasons why some investors tend to establish new buildings in these old neighborhoods, he attributed it to the high rate of profit compared to neighboring neighborhoods, and said that investors prefer internal properties close to the main streets because of their proximity to services, security, and because the price of rents is better. As for what can be developed in these old neighborhoods to suit the Saudi family, he said that this is possible by developing them, expanding the streets, re-planning narrow streets, and increasing the security presence, and said that most of the tenants are expats, mostly Africans, and the largest percentage are families and then workers.
Most tenants are expatriates and mostly Africans, and the largest percentage are families and then workers.
<About the prices of old houses if they are valued as land at the current price, Abu Nayyan said that they range from 650 to 750 riyals per meter for residential, and commercial up to 2000 riyals per meter, and he said that the preferred streets for the consumer and investor in the neighborhood are commercial streets because they allow multiple floors, and he said that he has recently noticed an increase in requests to buy land and rebuild old buildings, and there are abandoned houses that pose a danger to the neighborhood. He pointed out that the reason for the abandonment of the owners is sometimes due to being an old endowment and forgotten by its owners. He said that the work of most of the residents in this neighborhood are private sector employees and low-income people who have difficulty paying their rents, noting that the high population density in the neighborhood is due to the fact that the rents are lower than in neighboring neighborhoods.
<Mr. Abdulrahman Al-Mughailith ............................. Abdulaziz Al-Budairi ............. and Mohammed Al-Mughaylith ............................. In most of what their colleagues went to talk about the reasons for the phenomenon of investors returning to the old neighborhoods, to buy land and buildings and rebuild them, because the conditions are similar as the land and buildings are cheap, and the tenants are many and most of them are expatriates and Saudis with limited income and small employees, and whether it is possible to develop these neighborhoods to be suitable for the Saudi family, these speakers saw the possibility of this through expanding and paving streets, developing services and providing a security presence.
These speakers saw the possibility of this by expanding the streets and paving them, developing services and providing a security presence. <They are looking for better housing and lower rent! In the Shamisi neighborhood, Amlak met with one of the owners of real estate offices, Mr. Ahmed bin Abdulrahman Al Abad, and his answers were close to the answers of his previous colleagues due to the similar conditions in the old neighborhoods, but he explained that the majority of people want to leave the old houses and live in new buildings, at a price close to the previous rent, due to the presence of these neighborhoods in the city center, and because of their proximity to services and markets.
The reasons why investors prefer the internal properties near the main streets are due to the ease of exit and entry into the neighborhood, its proximity to the public street and services and because it is safer than internal streets.
On the possibility of developing these old neighborhoods to suit the Saudi family, Al-Abbad said that this is possible by developing them, re-planning them again like the new plans, widening the streets, building parks in them, and establishing green spaces like the neighborhoods of northern Riyadh, so that the streets are not muffled, because they cause security risks. As for the quality of tenants, he said that most of them are foreigners of Pakistani nationality with other nationalities, who live more than 20 people in popular houses to reduce the cost of rent, and explained that the largest percentage of the population is foreign singles with a percentage of poor families of Saudi nationality and others.
When it comes to the prices of the old neighborhoods, the majority of the population is from foreign singles, with the presence of poor families of Saudi and other nationalities.
<As for the prices of old houses if they are valued as land at the current price, Al-Abbad said that a popular house with an area of 80 m is about 1000 riyals per meter, while the land starts from 1000 riyals to 1500 riyals, although the closer the land is to the main street, the more its price increases, and if the house is built, its price decreases because whoever buys it will demolish it and then rebuild, and said that the streets that are desirable for the consumer and the investor are: For the consumer, it is on a street with a width of 15 m and above because of the availability of parking, while the investor prefers main streets from 30 m width and above because there are more floors and thus more apartments.
<He said that recently he noticed an increase in requests to buy land and rebuild old buildings unexpectedly, and the demand for old houses increased in order to take advantage of its land and rebuild it, because construction in Shumeisi is cheaper than other neighborhoods due to the availability of labor and its proximity to services, markets and work sites and the cheap cost of construction, so tenants prefer it, especially those who work in popular markets near the neighborhood, because they save the value of using a taxi (limousine) for those without a car, for example 90% of buildings behind Bin Dail markets have been rebuilt.
Why don't they want to sell their old properties? He added that some people now do not want to sell their old properties, as the owners behind the Mecca markets hold on to them, thinking that the Municipality plans to develop the area like some nearby neighborhoods, which would then raise its value, and he said that this neighborhood is very densely populated, because the rents are much lower than other neighborhoods, and Abad appealed to officials in the Riyadh Municipality to look for a solution to the dilapidated popular houses in this neighborhood He said that this neighborhood is very densely populated, because the rents are lower than other neighborhoods, and he appealed to the officials of the Riyadh Municipality to look for a solution to the dilapidated popular houses in this neighborhood, because they pose a danger to the lives of citizens and pose a security risk, as they are used as a shelter for drug addicts and kidnappings, and they are not a civilized facade of a city like Riyadh, and narrated an incident that a family who lived in a popular house lost two of their sons when the house collapsed after the rains.
<Amlak met with a number of other owners of real estate offices in the old neighborhoods of Riyadh: Mr. Saleh bin Ahmed Shatour ...................., Abdulaziz bin Saleh Al-Eid ............................, Saleh Al-Qasim (Khairin Real Estate Holding Company), Zafer bin Mubarak Al-Breik ...............................Saad bin Mohammed Al-Aibani ..........................., Saad Al-Naima .............................., Fahad Al-Mukhaileeb (Fahad Al-Mukhaileeb Office) Their answers and opinions were mostly consistent with what their colleagues who we have already spoken to decided, and one of the most important things they focused their conversation on was that the reasons for the phenomenon of investors returning to the old neighborhoods, to buy land and buildings and rebuild them, due to the similar conditions in these neighborhoods, land and buildings are cheap, and the tenants are many and mostly expatriate nationalities and Saudi people with limited income and small employees.
These are the reasons for the return of investors to the old neighborhoods.
<Prices range from 650 for residential to 3,000 for commercial:
As for whether it is possible to invest in these old neighborhoods for the housing of Saudi families, these speakers believed that this can be achieved by expanding and paving the streets, developing services and providing a security presence, and about the prices of old houses if they are valued as land at the current price in these neighborhoods, our interlocutors said that they range between 650 to 750 riyals per meter for residential, while commercial reaches 2000 riyals per meter, and in another neighborhood prices reached between 1000 - 1200 riyals for a residential meter overlooking the sea.1,200 riyals for a residential meter overlooking one street, while the price rises to 1,300 riyals for residential, and commercial reaches 2,500-3,000 riyals, and in another neighborhood the price reached more than 1,000 riyals per meter if the land is residential, while commercial has exceeded the barrier of 2,000 riyals.
On the rates of demand by investors in recent times to buy land and rebuild old buildings in these old neighborhoods, our speakers said that they notice this unexpectedly, to take advantage of these lands and old houses and rebuild them, because construction in these old neighborhoods is cheaper than other neighborhoods due to the availability of labor and its proximity to services, markets and work sites and the cheap cost of construction, so tenants prefer it, especially those who work in the popular markets near these neighborhoods.
