Bahrain in dire need of social housing projects

Manama, Bahrain's capital. Apartments should be seen as a viable step in to villa ownership, says a new report.

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The waiting list for social housing in Bahrain has reached critical levels, with demand far outstripping the number of new build projects in the Kingdom – according to a report by US-based real estate consultants CB Richard Ellis.

There are around 53,000 households on the waiting list, with demand growing by up to 4,000 per year – far exceeding “the rate at which the Government can address the problem, and the situation looks set to worsen in the short term,” the report says.

Social housing is offered to Bahrainis earning less than BD400 (US$1060) per month and, with 53,000 households falling in to this category where the total number of Bahranis employed is around 138,000, the report says it’s very disconcerting.

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FEATURED COMMENT Bahrain has 757 sq.km land area. Assume there's 10% allocated for afforadable villas at 250 sq.m. plots provided to the   3 Comments Read more comments »

Affordable housing, the next step up from social housing, is also fraught with two main difficulties, according to the report.

The first is that Bahranis don’t see an apartment as a logical step towards ultimately owning their long term home. The report says that the typical Bahraini household prefers to live in and own a villa or townhouse, on a plot of land they also own. They also see their first home as their long-term permanent home.

The second issue, the report states, is that due to “rampant land trading that has taken place in Bahrain in the last few years, prices of land earmarked for low density residential development have risen sharply and in most areas can be found in a range broadly around the BD20/ft² level.”

“Based on a small plot of 225 square metres, the cost of the land alone would be around BD50,000.”

“The subsidised mortgage for mid to low-income Bahrainis offered by the Government only amounts to BD40,000 –not even enough to buy the small plot of land on which a Bahraini household would want to build their house,” the report says.

“When the costs of construction are added in, it is simply not possible for developers to meet the demand for “affordable” housing.”

“There is a structural problem in Bahrain in that the relatively low average salaries of Bahrainis, allied with the availability and cost of finance simply do not allow them to buy the houses that the developers build for them.”

The report also says that market subsidence from luxury apartment development – with transactions in the sector at all-time lows – has also impacted on developers, with many projects slowing down, or even being postponed.

”Many residential project masterplans are currently being reconsidered in terms of development uses, unit sizes, target markets and much more attention is being paid to the issue of phasing”

“The problem remains that while developers sit on thousands of part-built residential units, there are thousands of households that require housing.”