Residential rents have increased 20 per cent in Jeddah due to high prices of building material and real estate, a report quoting experts said.

Abdullah Al-Ahmari, a member of the real estate committee at the Jeddah Chamber of Commerce and Industry (JCCI) was quoted by the Arab News report as saying that some landlords have hiked their rents by about 20 percent. "It is very difficult for people with low incomes to get apartments at reasonable rates,” he said.

He claimed there are only 2,000 homes available in Jeddah, which makes it necessary to find more housing units to balance supply and demand.

Skyrocketing rents, which started five years ago, have created financial problems for many Saudi families which live in four-room flats. At the same time, many landlords have tried to only attract expatriates by building small flats consisting of two rooms that are not adequate for families. The annual rent for a small flat is in the region of SR35,000, the report said.

Many landlords also raise rents unreasonably every year, and warn families that they either pay up or leave, the report said.

Real estate experts expect apartment construction for low-income families to stop with the rise in prices of building materials, rising wages in the construction industry and high land prices. Construction prices have increased from SR95 to SR130 per sq m, the report said.