Rental price transparency: A new data tool for renters in Saudi Arabia
According to the 2022 official census, over 4.4 million households (i.e. 54.2%) live in rental properties, while only 2.5 million households (30%) own their homes.[1] Despite rentals being the predominant form of housing, the real estate technology sector continues to prioritize housing buyers and homeownership services, which leaves a significant information gap for the majority of residents in Saudi Arabia.
To address this market inefficiency, I have developed a rental comparison tool that allows individuals to evaluate their current or proposed rent price against other rental properties in their chosen neighborhood or region within Riyadh (i.e. East, North, etc..). In this beta version, the tool currently focuses on the capital city: Riyadh.[2]
The tool’s development was inspired by successful platforms like Rentometer in the United States, which many individuals like myself have utilized for rent negotiations while living in the US. However, the available digital real estate solutions in Saudi Arabia predominantly focus on sales listings, mortgage calculations, and returns on investments, and although such platforms are valuable, it leaves the rental sector, which represents the majority of the Saudi Arabian housing market underserved.
The rental comparison tool offers two main features to serve different user needs. The first is a price comparison feature that allows individuals to enter their specific rental details such as:
1. price,
2. property size,
3. location, and
4. furnishing status
To then check how their rent compares to similar properties in their area. The tool then analyzes these parameters against current market data and shows users whether they are paying above or below the median rate, and by what percentage. This empowers renters with concrete data for their rental negotiations.
The second feature is a neighborhood exploration tool that enables users to discover and compare rental markets across different areas of Riyadh. Users who have not decided on a given neighborhood yet can filter properties by their preferred rental budget, size requirements, and furnishing status to see median prices across neighborhoods. This feature is particularly valuable for those planning to relocate within Riyadh or newcomers to the city who want to understand which neighborhoods best match their budget and preferences before starting their property search.
Try it out here: https://mealkhowaiter.shinyapps.io/RentalComparisonTool/
The tool’s practical applications extend beyond individual renters. For instance, policymakers can better understand rental market dynamics at a high time frequency and in different geographic areas at a level much more granular than publicly available indicators from GASTAT. This initiative represents a first step toward bringing greater transparency to the rental market and empowering renters with up to date information.
Please reach out for any suggestions to improve the tool through Linkedin or email.
[1] The ownership rate is higher when looking at Saudi households strictly at 60.6%.
[2] This choice was driven by Riyadh’s position as the country’s largest rental market, in terms of both volume of listings and price levels. I intend on expanding the tool in the future to cover other major Saudi cities.