The Mena mortgage market is set for double digit growth, experts concluded at the Mena Mortgage and Affordable Housing Congress in Bahrain.

The event, from the organisers of Cityscape, is being held under the patronage of the Central Bank of Bahrain, and in partnership with Sakana Holistic Housing Solutions and Naseej Properties, at the Radisson Blu Hotel, Manama.

“The Mena population is growing at a rate of 2.1 per cent, which is high in comparison to world population growth; and with approximately 60 per cent of the population under 25 years of age, home ownership demand is huge,” said R Lakshmanan, CEO of Sakana Holistic Housing Solutions, a key partner of the event along with Naseej Properties.

“Regional governments in the post-Arab Spring era will be increasingly focused on housing and we believe that the market is likely to witness double-digit growth over the next few years, provided regulations evolve quickly to address the affordable housing segment.”

When compared with international markets, negligible amounts of GDP are allocated to mortgages in Mena countries. “Whilst in countries such as the UK and the US, outstanding mortgage stock accounts for around 100 per cent of GDP, this figure drops to just under 1 per cent on average in North Africa, 7 per cent in the UAE, and just 2 per cent in Saudi Arabia,” said Alex Gemici, managing partner of Greenstone Equity Partners.

“As these figures show, there is enormous potential for growth in the home financing market in the Middle East, and we foresee phenomenal growth for the sector in the coming years.”

Despite this market growth potential, major challenges continue to restrict the development of the sector, an expert panel including Sakana Holistic Housing Solutions, Tamweel, Deutsche Gulf Finance and Saudi Home Loans highlighted. 

A lack of adequate regulations, underdeveloped capital markets, lack of synergy between pension funds, insurance companies and mortgage providers, and insufficient credit bureaus were identified as the major challenges to the industry.  A shortfall in affordable housing provision was also highlighted as a major challenge to the industry and this will be discussed on day two of the event tomorrow  (November 24). – TradeArabia News Service