Housing Shortage To Remain Challenging Issue
BMI View: Bahrain's government has put forward several initiatives in a bid to address the country's long-running housing shortage, a perennial source of political and social tensions. While these schemes benefit from GCC funding and the involvement of the private sector, we note that high land prices and the current risk-adverse investment climate will continue to undermine housing construction activity over the coming years.
Since the start of 2013, Bahrain's government has advanced several schemes in an attempt to address the country's long-running housing shortage, a perennial source of political and social tensions. In May, Housing Minister Basem Al Hamer announced plans to spend US$7.9bn on government housing units by 2017. Public-private partnership (PPP) schemes are particularly in favour; in February 2012, the government signed a landmark US$550mn contract with local developer Naseej for the construction of 4,000 homes in the Northern City, Al Buhair, and Al Lawzi. Ithmaar Bank provided US$450mn in financing for the project in October 2013, and the first phase of units is now expected to be delivered by June 2016. The government also launched a pilot social housing finance programme on November 3 for around 1,200 eligible applicants, designed to diversify options for nationals.
At the root of these initiatives is a waiting list for government housing officially estimated at 53,000 households, out of a total population of 1.2mn (including 584,000 native Bahrainis). While poorer nationals across the Gulf monarchies have traditionally relied on the government to provide subsidised housing, approximately 45% of outstanding requests in Bahrain were lodged in 1993 - when access to public housing was first introduced. Moreover, the number of new applications now increases by 8,000 every year, according to Bahrain's Housing Projects, Construction and Maintenance Directorate, faster than construction can proceed. In a Gallup survey carried out in October 2010, 41% of nationals and Arab expatriates reported they had lacked enough money to pay for adequate shelter over the past 12 months, up from 24% in March 2009 and by far the largest proportion in the MENA region. Only 33% called themselves satisfied with the availability of housing.
|Struggling To Accommodate A Fast-Rising Population|
|Bahrain - Total Population, mn|