Across the MENA region there is a serious undersupply of affordable housing, which is recognised as one of the underlying causes of the recent social unrest. The need to provide more affordable housing represents one of the most important challenges for governments but also an excellent opportunity for real estate developers and investors.
However, developing large numbers of new affordable housing units is much easier said than done. The barriers include high land costs, high infrastructure costs, a fragmented building and development industry, lack of experience in high volume system building and limited access to mortgage finance.
In my view, these problems are solvable. The solutions however will require governments across the region to adopt a radical new approach, a key component of which needs to be more innovative public private partnership (PPP) arrangements between the government and the private development industry.
The combination of a large current shortfall, growing demand and government policies aimed at supporting growth, combine to make affordable housing arguably the greatest opportunity for real estate developers and investors in the MENA region over the next 5 years.