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Tue 10 Jan 2012 11:38 AM

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Sharjah ruler unveils $5.4m fund for low-cost homes

Gulf emirate has shortfall of 5,000 affordable homes, is fast-tracking building plans

Sharjah ruler unveils $5.4m fund for low-cost homes
Sharjah has a shortfall of 5,000 affordable homes, its ruler said

Sharjah’s ruler has ordered an AED20m ($5.4m) fund be made available for Emirati families living in homes allocated for demolition until affordable housing projects have been completed.

Demand for affordable housing has doubled annually in the emirate and is currently at 5,000 homes a year, HH Sheikh Dr Sultan bin Mohammed said during a phone-in on the Al Khatt Al-Mubashir program on Sharjah TV.

Affordable housing developments for those in buildings not suitable for living have been fast tracked and will be completed within 18 months, he added. 

Living costs were a key issue in the wave of political unrest that swept Bahrain and other Arab states last year, toppling rulers in Egypt, Tunisia and Libya. The MENA region has an estimated affordable housing shortfall of 3.5 million, pricing homes out of the reach of many citizens.  

Saudi Arabia has the largest shortfall in the Gulf of 400,000 homes followed by 40,000 homes in Bahrain, 20,000 in the UAE and 15,000 in Oman, according to consultancy Jones Lang LaSalle (JLL).

Several Gulf states have pledged to ramp up spending on housing in the wake of the Arab Spring revolutions, in a bid to secure quality housing for their growing populations.

The Bahrain government last week signed a record BD208m ($550m) with a local developer to build more than 4,000 homes in a bid to ease the Gulf kingdom’s chronic low-cost housing shortage.

The deal, a first in the GCC, will see Bahrain-based Naseej build 3,110 social housing units and a further 1,042 low-cost homes in the Northern City, Al Buhair and Al Lawzi projects.

Saudi has pledged to spend $130bn on social projects such as building low-cost housing and creating jobs, while King Abdullah in March said he would spend $67bn on 500,000 new homes.

Several Dubai-based developers have turned their sites to midmarket housing in a bid to fill the gap left by the collapse of the emirate’s housing bubble.

Emaar Properties, developer of the world’s tallest building, said in November it was talks with several UAE emirates to roll out affordable housing schemes. Chairman Mohamed Alabbar said Dubai still has room for properties at a price point of around AED500,000 (about $136,000). “We're talking to a few emirates. I'm going to focus on Dubai to start with,” he told Arabian Business. “We are talking about [property] of maybe AED550,000 for someone with an income level of around AED12,000 a month,” he added.