01 November 2010

AFFORDABLE housing has become a national priority for GCC countries, a recent summit in Bahrain was told.
Affordable housing issue is extremely relevant and important to the GCC countries as there is a huge mismatch between demand and supply, said R Lakshmanan, chief executive officer of Bahrain-based Sakana Holistic Housing Solutions, an Islamic mortgage finance provider.

Lakshmanan, who was one of the main speakers at the Middle East Affordable Housing Development Summit held in late September, spoke on the key issues of affordable housing and availability of finance in the GCC.

Surveys indicate that approximately 65 per cent of Bahraini nationals and 50 per cent of Saudi nationals earn less than $2,000 per month and using the commonly accepted standard of spending 30 per cent of one’s monthly income on housing, this segment of the population is currently unable to afford a house with two bedrooms, he said.

The GCC governments have so far been providing free land or houses or subsidised finance costs. However, as the Gulf’s population grows, governments are being increasing pressed to provide affordable housing with waiting lists in some countries now running at more than 10 years, he said.

“Further, GCC nationals generally prefer to own a villa with couple of bedrooms instead of an apartment, posing a challenge to governments as the cost of a villa is higher and customer’s monthly income is not sufficient to afford mortgage or rental payments,” he said.

Lakshmanan said that Bahrain has taken a lead to build 5,000 homes in the first stage of a public-private partnership and this approach must be adopted by GCC countries to solve the housing problem.

He also added that changes in legal and regulatory framework will be required to strengthen housing and mortgage sectors and noted that the Abu Dhabi Urban Planning Council has taken a lead in including affordable housing as part of its newer housing developments.

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