By: Abdulrahman Shamlan
As part of the large toll a year-plus of crisis has had on the Yemeni economy, the nation’s real estate market has been delivered a significant blow
Many businesses, companies and enterprises have closed their doors. In addition, the amount of embassy staff members present in Sana’a has significantly decreased for security reasons. While before such individuals would rent large villas in Sana’a, their absence has since helped to trigger a recession in the real estate market.
It tends to be true all throughout the world: if an economy is booming, real estate market activities will be at their apex; but when an economy struggles, so too will the real estate market.
Many villas and furnished apartments in Sana’a’s upscale Haddah area, where many large companies are based, appear to be empty. Meanwhile, landlords have reduced rents in the hopes that their villas might soon be occupied again.
According to local real estate agents who spoke with the National Yemen, the real estate market in the Yemeni capital of Sana’a has experienced a difficult time as selling, buying, and renting has experienced a great slowdown.
However, some agents predicted that the real estate market would bounce back in the months to come. But they also stressed that the market wouldn’t see improvement unless security and stability were restored.
Mohammed Al-Harithi, a real estate agent in Haddah, told the National Yemen, “Many embassies used to lease big and expensive villas in Haddah, but many of them vacated the villas and left the country during the protracted crisis.”
He said a number villas, houses and apartments had been empty for over six months because while so many residences are vacant, demand is very low.
“Realizing that the real estate market was experiencing a recession, the owners of villas, houses and apartments decided to lower their rents. The average rent went down 30 percent. But in some cases, it hit an all-time low – about a 50 percent reduction,” said al-Harithi.
Speaking about the effects on agents’ incomes, he said, “Our income has been severely hit. We now get less than 30% of what we used to earn before the crisis showed its ugly face.”
According to him, although rental prices dropped significantly, the value of properties for sale was only slightly reduced, if at all.
Khaled Al-Alwai, the owner of a villa in Asar area, said, “I used to rent out the second floor of my villa for $600, but now I only receive half that amount as monthly rent.”
“My tenant came and asked me to lower the rent because he said he couldn’t afford to pay that amount of money anymore because his business had been severely hit by the crisis,” said Al-Alawi.
“At first I reduced the rent to $500, but when I noticed that he was about to leave the house and look for a smaller one, I started charging him only $300 per month.”
Musa Mutahar Fadael, another real estate agent, said real estate activity is now better than it had been in previous months.
“I can say that the real estate market state is improving and that demand has increased over the last couple months,” he said.
According to Fadael, most of the villas which have been empty for more than six months are owned by inflexible owners who have refused to lower rents in line with the low demand.
Not only has the rent in the more affluent areas gone down, but it’s also lowered in Sana’a’s more accessible neighborhoods.
Rajeh Saleh, the owner of a small house in Shumaila, said his house had stayed empty for more than five months after the former tenant left.
“When the second floor occupant left, I struggled to find another one even though I reduced the rent. In the past, I would find another tenant within a few days,” he said.