Industry reports reveal great need for affordable housing in GCC

imageBest Choice’s Samer Choucair sees influx of affordable housing solutions to address demand

 

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. 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.

Best Choice Real Estate Development, a Saudi Arabian real estate investment and development firm based in the Gulf, has forecasted that the region is set to experience an influx of affordable housing solutions to address the gap.  This was shared by Samer Choucair, Deputy Chief Executive Officer and Head of Investment, Best Choice, during his participation as one of the key panelists at the recently concluded Cityscape Qatar 2014. He, however, 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.

Choucair said: “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. 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. 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.”

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. UAE, Saudi Arabia, and Oman have executed similar projects to solve the housing deficit in their areas.

Moreover, the Best Choice’s Deputy CEO and Head of Investment looked into the two approaches being done by other countries to solve their housing deficit. 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 United States put a special focus on the lower–income group. Like in the GCC states, most of these countries also provide housing subsidies.

Established by a group of seasoned Saudi investors, Gulf-based Best Choice Real Estate Development offers exclusive properties for sale in different countries such as Italy and Spain. 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.