According to recent real estate market reports, housing rents in Saudi Arabia has taken a fall this year due to tough economic conditions and new labor fees imposed on expat employees.
A report issued by the Saudi Arabian Ministry of Housing showed a significant decline in the rental cost of houses in several Saudi cities in the first quarter of 2018. The report states that residential rents dropped by 7.9% in Jeddah, 3.8% in Mecca and 0.6% in the capital, Riyadh.
Turki Fadaak who is a member of the Saudi Economic Association, an academic and economic research body set up by King Saud University, said that the decrease in residential rents was mainly driven by the departure of many expat employees after the kingdom imposed an expat tax last year.
As part of its Saudization plan, the kingdom started imposing a 200 Saudi riyal levy per expat employee per month in 2017. The tax is paid by companies where expats’ employees exceed the number of local employees.
The kingdom also introduced a 100 riyal fee per dependent per month from July 2017. Both fees were subject to annual increases, and both almost doubled in 2018.