Looking back a year ago into the plans of the Saudi Government to effectively earn huge sums of money by taxing expatriates in one form or another, everyone but the government saw the toll it would take, not only with expatriates but with the local economy as well.
Fast forward to today, a number of expatriates have opted to send their families back home following the imposition of the dependents' annual fees than began July 1st. This has resulted in an unusually large number of apartments being vacated with no new tenants coming in.
Plenty of new apartments, lesser and lesser renters
In what seems to be the beginning of a domino effect, real estate prices in the Eastern Province have crashed, causing a nervous slowdown in the construction industry and effectively bringing down with it the price of construction materials.
According to real estate agencies, prices of land and houses have been on a continuous downward trend since the end of 2016. The market was hoping to see stability in prices at the beginning of this year. But the first quarter results showed an even more worsening figure.
For Rent signs are seen everywhere as more and more expats leave the kingdom.
According to trade analysts and real estate agents, prime land rates in Al-Khobar and Dammam in the Eastern Province witnessed a sharp decline of around 18%. The rates were even lower in remote areas, going down by more than 20%.
The fall in the prices began about six months ago when nervous expatriates accepted the fact that the government was hell-bent in imposing the expat fees as well as new taxes, and that they would have to face the brunt of it.
Alongside the decline in real estate price, Saudi Arabia has also witnessed a sharp drop in house rents in the past 8 months. This is mostly due to the fact that a majority of renters are expats, mainly because they are not allowed to purchase real estate properties in the kingdom.
According to one estimate, house rents in prime locations in Al- Khobar and Dammam have gone down by 15 to 20% in a country where just a few years ago, rents were expected to increase annually. Real estate agents fear further slide in rental rates as there are more vacant houses and less takers - this after the government, in a bid to stabilize the then increasing rental rates, pressured landowners to develop unused lots or risk a government buyout.
According to one estimate, house rents in prime locations in Al- Khobar and Dammam have gone down by 15 to 20% in a country where just a few years ago, rents were expected to increase annually. Real estate agents fear further slide in rental rates as there are more vacant houses and less takers - this after the government, in a bid to stabilize the then increasing rental rates, pressured landowners to develop unused lots or risk a government buyout.
Commercial spaces are also affected as more and more expats leave homes and businesses due to policies seen as unfavourable, even aggressive, against expats.
"A four-room apartment which was rented for SR24,000 a year is now offered at SR22,000 or less," one real estate agent is quoted as saying. Similarly flats in Dammam Housing (Iskan), which were fetching rent as high as SR35,000 a year until last year, are now lying vacant with a rent tag of SR25,000 per annum.
Agents say the rent prices are expected to come further down as many more expatriates will send their families and dependents to their respective homes. The major reason real estate brokers cited was nervousness in the market over large-scale exodus of expatriates from the Kingdom.
No doubt that new fee on expatriates, increase in visa fee and other expat-related hikes will initially bring in huge revenue and will also help in Saudization campaign, but economists warn that the flight of expatriate workers is disturbing the projected population ratio, thus affecting demand. The impact will not be restricted to real estate but will spread to consumer items, services and even industrial products.
The declining land prices and house rents have already impacted the construction industry adversely. Construction companies are getting less and less contracts, forcing them to lay-off a huge number of employees. Some companies have totally closed shop. Since construction on several projects has either slowed down or completely stopped, the construction-related material industry has also suffered a major setback.
The worst affected is the cement industry which has witnessed lowest price decline since 2008. According to market retail rate a metric ton of cement that was costing SR240 is now costing between SR130-170. The high quality Sulfur Resistant Cement, which was being sold in retail market for SR260 per metric ton, has gone down to SR150-190.
The larger cement companies including Yamama Cement, Eastern Cement, Qassim Cement have experienced a decline in profit from 46 percent to 81 percent in the first six months of 2017.
Industry expert say that these declines will eventually impact other industries as well and unless some drastic corrective measures are taken, the situation is likely to worsen further.
sources: Saudi Gazette
©2017 THOUGHTSKOTO
SEARCH JBSOLIS, TYPE KEYWORDS and TITLE OF ARTICLE at the box below
![July 01, 2017 - New traffic rules and fines come into effect today in the UAE. Senior police officials are confident that these will will reduce the number of deaths on the roads and that the results will be seen after the law's implementation. The [new] law is more harsh and has tough punishments for dangerous offences like reckless driving, using the phone when driving and speeding,” Major-General Mohammad Saif Al Zafein said. He is the director of the Director of the Federal Traffic Council. He clarified that the main purpose of the law, which came into effect July 1, is to make roads safer and not to make more money from motorists. The list of violations and their corresponding fines are listed below Generally, motorists believe that any increase in traffic fines aims to collect more money but that’s not the truth. Under the new law, fines for some offences have been reduced. "People need a strong deterrent to prevent them from violating [traffic rules]. When there is a large sum of money [as fines], they will think many times before breaking the rule because no one wants to spend his earnings on traffic fines. I am sure that as soon as the new traffic law is implemented, we will see a reduction in road fatalities," according to Major Abdul Rahman Khatr, director of the Traffic Awareness branch at Sharjah Police. Officials point out that most traffic accidents occur when motorists fail to abide by the traffic rules — be it regarding speed limits, respecting the red signal, overtaking from the wrong side or using the hard shoulder to overtake. Currently, there are over 200 different fines you could get on the roads in the UAE. Below is the list of violations and the corresponding penalties. VIOLATIONS FINE BLACK POINTS Vehicle confiscated / Days 1 Driving under the influence of alcohol Decided by court 23 90 2 Driving under the influence of drugs or similar substances. Decided by court License to be suspended for 1 year from the date of punishment completion 60 3 Driving a vehicle without number plates. Dh3000 23 90 4 Driving a heavy vehicle in a way that endangers his or other people’s lives, harms public or private properties, jumping the red light, causing his or another vehicle to overturn Dh3000 License to be suspended for 1 year 5 Heavy vehicle not abiding by lane discipline. Dh1500 12 6 Driving a heavy vehicle that does not comply with safety and security conditions. Dh2000 6 7 Loading a heavy vehicle in a way that may cause danger to others or to the road. Dh2000 6 8 Entering road dangerously. Dh600 6 9 Causing death of others. Decided by court 23 60 10 Not stopping after causing an accident that resulted in injuries with a light vehicle. Dh500 8 7 11 Not stopping after causing an accident that resulted in injuries with a heavy vehicle. Dh1000 16 12 Failure for light vehicle to stop after causing an accident Dh500 8 7 13 Failure for heavy vehicle to stop after causing an accident Dh1000 16 15 Exceeding maximum speed limit by more than 80km/hr for light vehicles Dh3000 23 60 14 Exceeding maximum speed limit by more than 60km/hr. Dh2000 12 30 25 Exceeding maximum speed limit by not more than 60km/hr. Dh1500 6 15 26 Exceeding maximum speed limit by not more than 50km/hr. Dh1000 29 Exceeding maximum speed limit by not more than 40km/hr. Dh700 31 Exceeding maximum speed limit by not more than 30km/hr. Dh600 37 Exceeding maximum speed limit by not more than 20km/hr. Dh300 17 Driving in a way that endangers people Dh2000 23 60 18 Jumping a red light for light vehicles Dh1000 12 30 19 Jumping a red light for motor bikes Dh800 4 30 20 Running away from a traffic policeman in a light vehicle Dh800 12 30 21 Running away from a traffic policeman in a heavy vehicles Dh1000 16 22 Dangerous overtaking by heavy vehicles where it's prohibited Dh3000 1 year 23 Causing a car to overturn by heavy vehicles Dh3000 1 year license suspension 24 Causing serious injuries. Decided by court 23 30 27 Overtaking on the hard shoulder. Dh1000 6 28 Overtaking from a prohibited place. Dh600 30 Parking in fire hydrant places, spaces allocated for people with special needs and ambulance parking. Dh1000 6 32 Driving against traffic. Dh600 4 33 Allowing children under 10 years old or shorter 145 cm to sit in the front seat of a vehicle. Dh400 34 Failure to fasten seat belt while driving for all passengers. Dh400 4 35 Failure to leave a safe distance. Dh400 4 36 Failure to follow the directions of the policeman. Dh400 4 38 Entering a road without ensuring that it is clear. Dh400 4 39 Exceeding permitted level of car window tinting. Dh1500 40 Not giving way to emergency, police and public service vehicles or official convoys. Dh1000 6 41 Driving a noisy vehicle. Dh2000 6 42 Allowing others to drive a vehicle for which they are unlicensed. Dh500 7 43 Overload or protruding load from a heavy vehicle without permission. Dh3000 12 44 Driving a vehicle that causes pollution. Dh1000 6 45 Stopping on the road for no reason. Dh1000 6 46 Stopping on a yellow box. Dh500 47 Not giving pedestrians way on pedestrian crossings. Dh500 6 48 Failure to abide by traffic signs and directions. Dh500 49 Throwing waste from vehicles onto roads. Dh1000 6 50 Stopping vehicle on the left side of the road in prohibited places. Dh1000 51 Stopping vehicle on pedestrian crossing. Dh500 52 Teaching driving in a training vehicle that does not bear learning sign. Dh500 53 Teaching driving in a non-training vehicle without permission from licensing authority. Dh500 54 Placing marks on the road that may damage the road or block traffic. Dh500 55 Operating industrial, construction and mechanical vehicles and tractors without permission Dh500 7 56 Modifying vehicle’s engine without permission. Dh1000 12 30 57 Changing vehicle’s color without permission. Dh800 59 Driving with a driving license issued by a foreign country except in permitted cases. Dh400 61 Parking behind vehicles and blocking their movement. Dh500 62 Towing a vehicle or a boat with an unprepared vehicle. Dh1000 64 No lights on the back or sides of trailer container. Dh400 2 65 Lights on the back or sides of container not working. Dh400 6 66 Taxis, which have designated pickup areas, stopping in undesignated places. Dh500 4 67 Prohibited entry of heavy vehicles Dh1000 4 68 Blocking traffic Dh500 69 Vehicle unfit for driving. Dh500 7 70 Driving a light vehicle that does not comply with safety and security conditions. Dh200 7 71 Not lifting exhaust of trucks. Dh1500 72 Not covering loads of trucks. Dh3000 74 Heavy vehicle prohibited entry. Dh1000 4 75 Violating loading or unloading regulations in parking. Dh1000 4 76 Carrying and transporting passengers illegally. Dh3000 24 30 77 Writing phrases or placing stickers on vehicle without permission. Dh500 78 Not taking road safety measures during vehicle breakdowns Dh500 79 U turn from undesignated areas of incorrectly Dh500 4 80 Loading a light vehicle in a way that may pose a danger to others or to the road. Dh500 4 81 Stopping vehicle without keeping the distance specified by the law from a curve or junction. Dh500 82 Transporting passengers by vehicle undesignated for this purpose. Dh1000 4 83 Sudden swerve. Dh1000 4 84 Driving on lanes meant for buses or taxis Dh400 85 Driving a taxi without required license. Dh200 4 86 Carrying passengers in driving training vehicle. Dh200 4 87 Driving a taxi with an expired warranty. Dh200 88 Reversing dangerously. Dh400 4 89 Taxi refusing to carry passengers. Dh200 4 90 Parking illegally Dh500 91 Parking in loading and offloading areas Dh200 92 Parking on the left hand shoulder of road in prohibited areas Dh1000 93 Parking without securing the car Dh500 94 Using multi-colored lights. Dh200 95 Not wearing helmet while driving motorbike. Dh500 4 96 Exceeding passenger limit. Dh500 4 7 97 Expired tires Dh500 4 7 98 Driving with an expired registration Dh500 4 7 (if registration expired more than 3 months) 99 Driving unlicensed vehicle. Dh5 00 100 Violation of laws of using commercial number plates. Dh500 7 101 Light vehicle dropping or spilling load Dh500 103 Driving with one number plate or faded numbers on plate Dh400 104 Driving at night or in foggy weather without lights. Dh500 4 106 Not fixing reflective stickers at the back of trucks and heavy vehicles. Dh500 107 Not using indicators when changing direction or turning. Dh400 108 Not giving way for vehicles to pass on the left. Dh400 113 Overtaking dangerously Dh600 6 114 Driving an unlicensed vehicle. Dh500 4 7 119 Parking vehicles on pavement. Dh400 129 Driving below minimum speed limit. Dh400 131 Using hand-held mobile phone while driving or being distracted in any way Dh800 4 138 Using horn in a disturbing way. Dh400 4 140 Failure to hand over a driving license when the maximum black points are accrued in the first traffic violation Dh1000 141 Failure to hand over a driving license when the maximum black points are accrued in the second traffic violation Dh2000 142 Failure to hand over a driving license when the maximum black points are accrued in the third traffic violation Dh3000 143 Failure to pick up confiscated car once the confiscation period is over Dh50 a day maximum of Dh3000 144 Failure to pick up confiscated heavy vehicle once the confiscation period is over Dh100 a day, maximumDh3000 145 Overloading a light vehicle Dh500 4 146 Driving school vehicles in times and areas that are prohibited Dh400 147 Teaching someone to drive in a car that is not labeled as learning vehicle, or teaching without a license Dh500 148 Not presenting a learners permit Dh300 149 Broken or absence of back or sidelights on the tow truck Dh500 4 150 Participating in a motorcade without a permit Dh500 4 15 151 Pedestrian’s failure to abide by signals, or crossing from undesignated areas Dh400 152 School bus driver failing to activate the stop sign or abide by traffic instructions Dh500 6 153 Driver failing to stop when the bus drivers activates the stop sign. Dh1000 10 154 Using a leisure bike with three or more wheels Dh3,000 90 155 Transporting inflammable ale or dangerous materials without permission Dh3,000 24 60 156 Failure to take safety precautions when the car breaks down Dh500 157 Failure to get the car technically tested after any major engine or chassis modifications Dh400 158 Broken Car lights Dh400 6 159 Disregarding policeman’s instructions Dh400 4 160 Failure to fix child seats for children under 4 years Dh400 161 Failure to give priority to emergency , police and protocol vehicles Dh1000 6 162 Stopping at Zebra crossings Dh500 163 Stopping vehicles and road turns Dh500 164 Parking in a way without securing the car Dh500 165 Parking on pavements Dh400 166 Writing or posting on the vehicle without a permit Dh500 167 Failure to abide by traffic signs Dh500 168 Littering from vehicle windows while driving Dh1000 6 169 Rubber neck and crowds at the scenes of traffic accident Dh1000 170 Driving a heavy vehicle dangerously in a way that endangers his or other people’s lives Dh3,000 License to be suspended for one year 171 Driving a heavy vehicle in a way that harms public or private properties Dh3,000 License to be suspended for one year 172 Heavy vehicle jumping the red light Dh3,000 License to be suspended for one year 173 Heavy vehicle causing his or another vehicle to overturn Dh3,000 License to be suspended for one year 174 Driving industrial, construction and mechanical equipment without a license Dh1,500 175 Heavy vehicle overtaking in areas where it is prohibited Dh3,000 License to be suspended for one year 176 Driving a heavy vehicle that does not abide by safety standards Dh2,000 6 177 A driving an uninsured vehicle Dh500 4 7 178 Driving a vehicle on a different license for a different type of vehicle Dh400 12 179 Driving a vehicle that does not abide by safety standards Dh500 180 Driving a vehicle that is unfit for driving Dh500 181 Driving a vehicle at below the minimum speed set for the road (if any) Dh400 Previous fines as of February 2016 (Some are revised as of July 1) 182 Not fixing number plates in designated places. Dh200 2 183 Exceeding maximum speed limit by not more than 10km/hr. Dh400 184 Violating the terms of the driving license. Dh300 185 Leaving a vehicle on the road with its engine running. Dh300 186 Using vehicle for purposes other than designated. Dh200 4 7 187 Using un-matching number plates for trailers and containers. Dh200 188 Stopping a vehicle in a way that may pose danger or block traffic. Dh200 3 189 Using training vehicles outside of timings specified by licensing authority. Dh200 190 Using training vehicles in places not designated by licensing. Dh200 191 Abuse of parking space. Dh200 3 192 Violating tariff. Dh200 6 193 Not showing vehicle registration card when required. Dh200 194 Not showing driving license when required. Dh200 195 Not fixing taxi sign where required. Dh200 196 Not fixing a sign indicating licensed overload. Dh200 3 197 Using interior lights for no reason while driving. Dh100 198 Failure to abide by specified color for taxis or training cars. Dh200 199 Failure to display tariff of buses or taxis or not showing them when required. Dh200 200 Broken lights. Dh200 6 201 Using horn in prohibited areas. Dh200 2 202 Failure to keep taxis and buses clean inside and outside. Dh200 203 Not abiding by taxi drivers obligatory uniform or not keeping it in good condition. Dh100 204 Smoking inside taxis and buses. Dh200 205 Calling on passengers in the presence of signs. Dh100 206 Not displaying truck’s load on both sides. Dh100 207 Driving without spectacles or contact lenses. Dh100 208 Not using interior light in buses at night. Dh100 209 Opening left door of taxi. Dh100 3](https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEip7C4mP7HDiPIfUzPC7Qz8ydA8Wuitidkhan5M82mkcskxYj6ak5z0L1NoI5lQcLmVozcXU9E8w7k6yC31tEkVBcnCg3h1fi7Qsgi4zqjdSoHoZTYRN-UazuhILcmGgRaXRa5R/s640/template.png)
