Wednesday, August 15, 2007

Cost of living in Saudi Arabia

One of the issues a potential expatriate wanting to work in Saudi Arabia should know is the cost of living in the kingdom and the savings he would be making as an expatriate. This is a rather tough question to answer, because there are factors such as income, habits of individuals, etc., which also have a bearing on the total savings. Nevertheless, a rough idea is given here.
Bread is usually quite cheap, though recently the cost of rice has increased by about 20%. Fuel is also very affordable and is currently around SR0.47 a liter. The only worrying thing is the cost of housing, which is going up exponentially. Most western expatriates prefer to stay in housing compounds, as mentioned in an earlier post. Due to the limited number of such compounds, the rents have gone up tremendously. Most of the companies which used to bear the housing of such expats have now changed their policy to paying house rent allowances instead, to offload their burden.
Eastern expatriates on the other hand, usually prefer to stay in apartments. A typical double room apartment for a family, which used to cost SR12000 a year now costs anywhere between SR15000 to SR18000 a year. For those who get housing allowances from their companies, this will put a big hole in their pocket. Expats living in apartments must enter into a contract with the house owners. Usually, the rent is payed in advance either once or twice a year depending on the agreement with the owner. For the period of the contract, the house owner cannot raise the rent. However, in case the expatriate wants to vacate the house and move to some other place, he has to pay the rent for the remaining part of the contract. Most house owners take advantage of this law and use it to their advantage for fleecing. In recent years, the rents have been going up at a mind-boggling rate. As this has a direct effect on the savings, most expats are now considering sending their families back home.
For potential expatriates planning to work in the kingdom, my advice would be to let the company take care of the housing. If this is not possible, then ask for a housing allowance which should not be linked to your basic salary (most companies pay 3 times the basic pay). After all, if you have the right skills and they need you, they would definitely pay you. If not, it's really not worth it.

12 comments:

Anonymous said...

Hi, have been offered a job to teach in Saudi Arabia but am not sure if the monthly salary is any good (13,400 SAR)> Can anyone tell me if this is a good salary? Thanks klaus

Expatguru said...

Klaus,

It is totally up to you to decide whether the salary you have been offered is "good" or not. However, I can say that it all depends on the package you have been offered. Have you been given rent-free accommodation (take care, this could otherwise put a gaping hole in your pocket!)? Read your contract carefully, check the background of your employer and if possible try to lookout for friends who might help. Good luck!

PH said...

dear guru,

my iqama profession is fanni decor, (decoration technician)but i have not been able to get the permanent family visa. i have done diploma in mechanical engg. though my work is entorely different from my iqama profession. and working in a good position with good salary. is this profession not eligible for family visa? first time my company person went and tried for this. if i go personally and try with jawadat office,will it help? pls advice.

Expatguru said...

PH,

This is a new trend we are seeing. In recent times, even technician visa holders are not being allowed to bring their families either on visit or on permanent visa. This trend started in Riyadh region, but I am not sure of other areas. The problem is that there is so much dearth of information that we can only guess from the experiences of others.

Anonymous said...

dear expat guru,
i got a job in riyadh as an engineer my employer is giving me 30000 SR yearly for accomidation.my question to you is will i be able to afford a decent flat or villa in a good coumpound.pease reply ASAP.

Expatguru said...

Anonymous,

This is a reasonably good amount for a flat. You may probably not get a villa for this amount, but certainly a double-room flat for your family in a decent locality.

Anonymous said...

I want to move to Riyadh, My company is offering 25000, monthly (package),
Please let me know if this is good or not?

Expatguru said...

Anonymous,

Please fill in your query in the form using the link in the top right corner of this blog. I charge a nominal fee for my consultancy, which would get you a detailed, personalized reply by email.

vishwaram said...

Hi brother,

I need to know with the 4,250 SAR is it possible to live a happy life(with my wife).. after seeing this blogshould i drop the offer for me at Saudi arabia..

Expatguru said...

Vishwaram,

I cannot answer whether you can live a "happy" life or not as it depends on you and also how you define "happy". All I can say is that with SR4250 per month, you will barely meet the expenses even for yourself.

Anonymous said...

Hi, I'd like to ask if there was a memorandum of not giving any cost of living allowances for expat in government sectors here in saudi? Or is it correct to say that the cost of living allowances should be added to the basic salary. thank you.

Expatguru said...

Anonymous,

Such a practice does not exist in Saudi Arabia. You would have to bargain well before signing your contract, otherwise you are stuck with whatever you signed before joining. However, if you get a better-paid job in some other country, you could use it as a leverage to increase your current salary. This is a normal practice here.