GCC sees big demand for affordable housing
Doha, June 4, 2014
The rapid urbanization and population growth in the GCC have resulted in an increased demand for affordable housing units from low- and middle-income households, said an industry expert.
"Private developers have a major role to play in addressing the acute lack of affordable housing stocks. We need to come up with creative solutions to address the housing deficit in the GCC and other regions," remarked Samer Choucair, the deputy CEO and head of investment at Saudi-based Best Choice Real Estate Development.
He was speaking at a panel discussion at the recently concluded Cityscape Qatar 2014.
"Private developers must take a proactive stance to help different states meet the housing shortage. This partnership between the public and private sectors is vital more than ever amidst continuous migration of people from rural to urban areas as well as rapid increase in the population," stated Choucair.
"They will need a decent place of their own to live. Both the government and the private sector have the responsibility to meet this crucial demand," he added.
Estimates from the United Nations show that the number people living in the cities is growing by an average of 2.1 per cent every year, while the region’s population is continuously booming and is expected to reach 52.9 million by 2020.
Faced with the enormous challenge of providing decent living to the target income groups, the heads of the GCC states have implemented massive social housing projects, various housing subsidy programs, and accessible loan mechanisms to meet the high demand.
Choucair said the region was set to experience an influx of affordable housing solutions to address the gap.
However, he maintained that much still needs to be done to address the housing shortage in the region. "For one, the GCC region remains largely underpenetrated when it comes to financing, with the mortgage penetration in Saudi Arabia and Kuwait ranging only from 2 per cent to 17 per cent, respectively," he noted.
During the panel discussion, Choucair discussed the GCC states’ efforts to meet the demand in partnership with the private sector. The initiatives included massive social housing projects, various housing subsidy programs, and accessible loan mechanisms.
Qatar, for instance, has developed certain areas such as Abu Hamour and Bu Sidra for its housing projects. In 2012, the Qatari government constructed around 18,000 residential units. Additional 10,000 units were built in 2013.
The UAE, Saudi Arabia, and Oman too have executed similar projects to solve the housing deficit in their areas.
Choucair looked into the two approaches being done by other countries to solve their housing deficit. The nations like Singapore, the Netherlands, Sweden, and Denmark opt to provide decent and affordable housing to the entire population, while others such as Canada, Malaysia and the US put a special focus on the lower–income group.
Like in the GCC states, most of these countries also provide housing subsidies, he noted.
Established by a group of seasoned Saudi investors, Gulf-based Best Choice offers exclusive properties for sale in different countries such as Italy and Spain, said Choucair.
It is also developing and selling mixed-use projects in Turkey and overseeing infrastructure and residential developments in the Kingdom of Saudi Arabia. The company is currently working on a five-star resort development in the Maldives as well, he added.-TradeArabia News Service