A look at the emergence of affordable housing segment in the GCC

Dubai Municipality announced in March this year that over 100 hectares of land in Muhaisnah district has been allocated for affordable housing development. Across the UAE's border with Saudi Arabia, nearly $66 billion (Dh242 billion) is being pumped into affordable housing projects, while last year the government of Bahrain announced plans to build 40,000 social housing units by 2022. Oman's Five-Year Development Plan (2011-15) also seeks to implement housing projects with a budget of $1.16 billion, or 8 per cent of total planned spending, and Oman's Sultan Qaboos Bin Saeed ordered a grant of $520 million for a housing assistance programme that includes housing loan projects. The emergence of an affordable housing segment in the GCC, particularly in the UAE, represents the maturing of the region's construction market and is creating new growth opportunities for construction companies.

Construction show

Affordable housing will be a key talking point at this year's edition of the largest construction exhibition in the Middle East, The Big 5, being held at the Dubai World Trade Centre. Stakeholders in the construction industry are expected to look into the issues surrounding affordable housing projects in the region and identify new strategies, techniques, technologies and methods to deliver such projects.

Traditionally, one of the challenges revolves around the need to strike a balance between commercial interests and social responsibility. It also requires building materials and land that are competitively priced, and project managers that can maximize budgets. Against this backdrop, organisers say The Big 5 can provide new insights on industry expertise, tools, products and machinery that can best cater to the segment and help reduce construction cost.

New trends

''The event will see 30 live product demonstrations, 75 continuing professional development workshops and seminars, more than 35,000 innovative products and technologies and more than 3,000 exhibitors from 147 countries representing steel, HVAC, water, coatings, building interiors, doors and windows, and a range of other industries,'' says Josine Heijmans, Event Director for The Big 5 2015. ''Many of the products will make their first appearance in the region, including US based Laticrete's Supercap pump truck technology, a LEED-qualified and Greenguard-certified technology that utilises a custom-designed mobile blending unit to pump material up to 50 stories high.''

To build affordable homes, contractors primarily have to lower the cost of construction materials and fast-track the project.

''These twin objectives are achieved by standardizing construction designs, adopting modular build practices, using precast hollow concrete blocks and using steel structures. Standardising construction designs expedites the initial stages of a project,'' explains Sanjay Bhatia, Managing Director of investment bank investment bank Alpen Capital, which has released a report on the GCC's construction industry. ''Keeping the project designs simple and modular allows for scaling the development up or down, permits its execution based on independent project phases and even allows for the devised framework to be replicated on other projects.

''Maintaining the efficacy of construction raw materials while reducing its cost requires a fine balance. The use of precast hollow concrete blocks and steel structures permits modular, cost-effective and durable housing options. Furthermore, its use permits a part of the construction work to take place off-site, which optimally reduces a project's direct resources, providing cost savings and accelerates the pace of a project.''

Alpen Capital's GCC Construction Industry Report, which came out in June, noted that the UAE is set to commence a Dh5.7-billion affordable residential construction project to accommodate as many as 385,000 expatriate workers.


New affordable housing developments and regulations in the region are a strong response from the authorities being confronted by middle-income housing challenges. However, those developments must also support sustainable development, says Saeed Al Abbar, Chairman of Emirates Green Building Council.

''Sometimes tend to overlook the long-term benefits of green building in the face of higher upfront costs,'' says Alabbar. ''It is important that all stakeholders understand the process. Our seminar at The Big 5 addresses the challenges and opportunities within the industry to raise awareness of the real value of these long-term benefits, and how everyone, from developers to end users, can benefit while conserving the environment and promoting sustainable practices.''

Construction technologies also need to be simple and cost-effective. The materials and labour costs, along with long-term durability and disaster resilience, are significant factors. Also, the community design needs to be integrated at the time of planning and building.

Dennis Steigerwalt, Managing Director — International at Ibacos, a building innovation firm, says pilot projects should demonstrate value through lab homes and technology showcases. ''Consumer confidence in the end will be driven by a demonstration of the concept,'' he says. ''When we can show the people who will eventually live in these homes that we're getting closer to what we set out to do, that's when we will get their buy-in.''

Experts agree that affordable housing projects in the GCC need to be a balance between quality, performance and process. However, the biggest hindrance is fragmentation. ''Collaborative innovation is the key and sustainability requires a holistic view and comprehensive engagement of all stakeholders, with the government taking the lead,'' says Steigerwalt.