Special Report: Real Estate - Revival of Gulf low-cost housing
For anyone unfamiliar with the Gulf’s real estate sector, the news that there is strong demand for affordable housing may come as a surprise.
High-profile luxury housing developments stole the headlines during the five-year Gulf real estate boom that ended in 2008.
But there is evidence of developers across the Gulf states redrawing plans to include housing for middle-income families in response to the real estate market downturn.
The developers’ response is partly due to their need to cut costs, but mostly because middle-income families - both indigenous and expatriate - are now driving demand in the new, more cost-conscious market.
Government support for affordable housing projects is also helping. In Saudi Arabia, the government has drawn up a metropolitan development strategy for Riyadh, with plans to develop urban centres on the outskirts of the capital.
In Bahrain, King Hamad bin Isa al-Khalifa has announced the issue of almost $800m worth of bonds to fund spending on low-value properties.
Gulf developers are learning that catering for buyers beyond the luxury property sector can be profitable, but the years of neglect for this section of the market means it will still take some time before the shortfall in affordable homes can be fully addressed.
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