Dr. Hussain Bin Saeed Al-Mushait Most societies suffer a gap between their desire to own private homes and their financial abilities to do so. This is noticeable in Arab societies in general and Saudi society in particular. Due to the grave importance of this basic and vital element for the stability of the individuals and the societies, a thorough study was carried out to accurately analyze of the factors that have direct or indirect influence on the financial abilities to own a house. Enough data has been collected to arrive at conclusive results. A social questionnaire was prepared in a simple scientific style to support the study about the social conditions of the families, the things they need to have in their houses and their financial abilities to buy the real estate units available for sale in the market. The Saudi families who were surveyed were randomly chosen. They lived in various areas in Jeddah. The questionnaire was distributed by hand to the Saudi families by a researcher who recorded all the answers. The surveyor, who knew all the residents, made visits to the family members at their homes or in their offices. The research problem The housing problem started to appear conspicuously in Saudi Arabia during the 1980s due to the economic boom that resulted from high oil prices. Land plots were being made to speculate in lands and real estate. Most of the plots were approved without any consideration for the availability of basic infrastructure or civic services. It is a fact of life that the design and planning of the cities and the residential quarters will have direct social and psychological impacts on residents. The luxurious districts with their good planning and consummate civic services will ensure a civilized behavior of the inhabitants. The behavior of residents in most of the random and underdeveloped areas was the opposite. The problem, therefore, lies in the unsuitability of the houses to the characteristics and basic features of societies in the least developed countries, especially in Saudi Arabia, for various economic, social, environmental and planning reasons. Size of the housing unit The study showed that the biggest demand was for three-bedroom houses with a ratio of 34.7 percent. Those who wanted four-bedroom houses were 25.2 percent. This was due to the large size of the Saudi families compared to the others. This was also in addition to the need to separate men and women in the reception areas. The monthly installments The study revealed that about 44.6 percent of the Saudi families were paying monthly installments for their cars. The average monthly installment was SR1,566. About 37 percent of Saudi families were also paying installments for other purchases that were being deducted from their monthly salaries. These installments ranged between SR551 to SR2,208. Society's look to the real estate market Saudi families, especially in Jeddah, view the real estate market negatively. They consider it to be extremely bad. This is mainly because of the difficulty of purchasing a housing unit according to their financial abilities. This pessimistic look is further augmented by the fact that about 60 percent of the Saudi families will not be able to own their private homes for five years at least under the static economic conditions and the fluctuating prices of real estate and construction. The other Saudi families who view the real estate market favorably believe that the available land and housing units, to some extent, match their financial potentials. They believe that they can buy houses at reasonable costs. The ratio of these people was 35.6 percent. Those who believe that the real estate market is good are about 18.3 percent. They are mostly those who have already obtained their own private homes or those with enough resources to buy. Methods of financing home purchases The study showed that about 75 percent of the Saudi families will not be able to finance the purchase of their homes without real estate loans, whether from the government or the commercial banks. Real estate loans will boost the ability of the family to purchase or build their own house. The families usually prefer the government loans because they are repaid without interest and over long periods of time. Sometimes the government will waive some of these loans, which are offered by the Real Estate Development Fund (REDF). A loan from this fund may take more than 15 years to get because of the large number of applicants. A small number of families, about 13.2 percent, depend on the accommodation programs of some of their employing companies. Saudi Aramco, for instance, grants its staff soft loans to own their private homes. Saudis who are able to buy houses from their own financial resources are not more than 11.6 percent. The study said about 36.8 percent of the families depend on real estate loans from the commercial banks or other funds to be able to obtain their own homes. This makes it imperative to review the real estate financing policy. Number of rooms in the house The study showed that the majority of the Saudi families live in housing units consisting of three to four rooms. About 26.6 of them preferred the three-room houses while 25.2 went for four bedrooms. About 22.9 percent said they were living in two-room houses while 16.8 percent lived in housing units with a single room. Those who lived in houses containing five to eight rooms ranged from 1.3 percent to 3 percent. About 19 percent of the Saudi families preferred the five-bedroom houses while 17.2 percent preferred houses with four to six rooms. Types of jobs held by family heads The study said about 94 percent of surveyed Saudis were either government or private sector employees. Saudis who were traders or businessmen represented 5.2 percent only. These results indicate that the majority of the Saudis are employed in official jobs with stable incomes, except those who are doing indirect business. Participation of wives in the labor market The study said only 21 percent of the wives were working women. This is a very low ratio. Unemployed wives accounted for 79 percent. This is not a positive indicator of the ability of the family to increase its income and so obtain its own home. The working wives usually contribute a monthly average of SR1,700 toward family expenses that can go up to SR2,400 maximum. This shows the importance of the participation of the wife in family expenses. Family's monthly income The income of the Saudi family is considered to be low in view of the country's wealth and the high cost of living. About 17.7 percent of the Saudis make a monthly income of less than SR4,000. Not more than 50 percent of the Saudi families can make SR7,000 a month. This is not a sufficient income to enable them buy their own homes, especially as these families do not have any other source of income. The stable incomes of about 15.8 percent of the families range between SR1,200 and SR1,300. Those with high incomes reaching SR15,000 or more are only 11.2 percent. These are the families who can easily buy their own homes. A study conducted by the Urban Center of the Jeddah Municipality in 2009 said the average annual income of the Saudi families was SR96,000 while the average annual house rent they had to pay was SR18,000, which represented about 18 percent of the individual's income. The study, however, noted that house rents had increased by more than 30 percent during the past two years. Types of houses Because of their low incomes, 66.5 percent of the Saudi families live in apartments. Those who live in villas were 16.9 percent. The families who lived in independent housing units or stayed with their relatives in the same building were 16 percent. Families who live in government houses were less than 1 percent. The study showed that 92 percent of the families were satisfied with the areas of their homes. About 66 percent of them are also happy about the floors they were occupying. Satisfaction about the furniture reached 69.5 percent because most families usually buy furniture that is suitable for them and their budgets. Average of monthly installment According to the study of the Urban Center, the average monthly installment the Saudis pay to the banks is SR2,208. The average monthly income of a Jeddah resident is SR9,061 while his average monthly expenditure is SR5,386. The three-bedroom houses are the most in the demand as 35 percent of the surveyed individuals preferred them. Those who wanted two bedrooms were 21.8 percent. Expenditure on accommodation The study showed that the average expenditure on accommodation was SR2,250, while on education it was between SR500 to SR2,000 depending on the number of children. The families spent between SR1,000 and SR3,000 on food, which also depended on the family size. The expenditure on communications and technology was between SR500 and SR1,000. Type of accommodation most desired The study indicated that the majority of the Saudi families preferred to obtain independent accommodation such as villas. About 72.8 percent of them opted for this type of housing. This goes back to the nature of the Saudis who prefer large size houses containing separate sections for men and women. They also love to live in houses with courtyards. According to the study, only 27.1 percent preferred to live in apartments. The reason for this might be that they were convinced that it would not be possible for them to obtain villas or independent houses. The prices of the apartments are less than those of villas, no matter how small they may be. About 92.8 percent of the Saudis lived in rented houses while only about 7.2 of them had their own private homes. Reasons for owning private houses The wish of the families to obtain their own private homes goes back to the keenness to achieve family security and stability. These families want to ensure the future of their children against any unforeseeable future circumstances including the sudden death or the incurable disease of the family head. These reasons were adopted by about 87.9 percent of the surveyed families. Those who were looking for personal comfort and complete privacy were 10.1 percent. The family savings from the annual rents of the housing units were 0.7 percent while financial investments in the accommodation were 0.3 percent. The study showed that about 60 percent of the families were optimistic that they could obtain their own private homes after four years. They believed that the Ministry of Housing would solve their problems. Those who believed they would own their private homes in five years were 4 percent.
