The Housing Problem

Bahrain 2030 Master Plan by SOM

The topic du jure is housing. My friends Tawfiq Al-Rayyash is livid that one of his ex-colleagues at Al-Wefaq political society has suggested that Bahrainis should go vertical – we should be content enough to live in flats rather than houses – but in the process, Tawfiq also shares with us some juicy details of the inner workings of Al-Wefaq!

Mohammed Maskati is teed off too, but from the angle that the Ministry of Housing has now put procedures in place that only those who earn less than BD900 in combined salaries (working couples) are now ineligible for subsidized government housing, and as he is fortunate enough to earn much higher than that limit, he feels that he is left unfairly out although Bahrainis are constitutionally guaranteed adequate housing and jobs.

Guys, I understand your frustration but although I am thankful that I own a house, financed through sheer hard work over 15 years in business I was able to save the required down payment and plonk it down to buy it. It will be a while before I pay the off the loan, but I am happy enough to do so.

The inability to buy a house of my choosing and the lifestyle that I wanted were actually the chief reason for me leaving Gulf Air all those years ago although I was earning much higher than the current BD900/1200 limits, I saw that “a salary” will never allow me to live the way I want to live. So I opted out and started my own business and that has been difficult to be sure, but the reward at the end is worth it.

I am no where near the goal of self sufficiency and I am already seriously looking into ways to double my income. There is no way that I could do that by holding a job.

My advice? Manage your finances and create and abide by a personal priority list. Read Ammar’s excellent pointers on managing your finances and start implementing them now. If you feel that you don’t have time and want to have that house NOW, then maybe you should think of creative business ideas (which are full time, part time for this just doesn’t work) and start making your “serious” money! But that’s just a pipe dream as businesses can very easily fail and do carry various risks. There is unfortunately no easy short-cut for you to take.

Either way, I would rather not wait for a hand-out from the government – even though it is my constitutional right to have subsidized housing provided for me – and go out there and get it myself and that’s exactly what I did.

But let’s put things in perspective: the housing provided by the government and its subsidies for this housing/land purchase/building/renting etc is meant specifically really for those with limited income and those who earn BD900 and above could hardly be called limited income! Those are well within “the middle class”. The issue then transforms into that person’s inability to buy a house or land to build on because of the prices involved. Well, let’s look into that: Bahrain Credit asks for 25% as down payment and they would be happy to finance for 15 years.

I know in other societies, first time buyers are encouraged to buy small and then sell and move up the scale as their financial abilities become better. Taking this principal in mind, an average first-time house or flat would be in the range of BD50,000 – 75,000. The down payment required (BC KFH) would be in the range of BD12,500 – 18,750. If a young couple both work and save BD500 per month from their combined salary they would need just 25-38 months. That’s a reasonable timescale I think.

If you would rather wait until you can afford to buy a BD500,000 house then you’d probably be ill-advised in doing so as the waiting period is far too long for most people and all that time you are waiting you’re paying rent which does amount to a considerable sum.

The above, I think, is not the real issue though – but detractors are latching on to it because it is an easy to understand issue, they know the level of frustration associated with it and they also know that their audience will be receptive to what’s coming next, the real issues they want to tackle: absence of social justice, unequal distribution of land and wealth (pdf – 8.6MB – arabic), etc.

Unfortunately, doing it this way brings passion into it and it becomes an emotive issue which robs it of its importance. These entangled issues should be separated and explained in a concise manner to people so that they can be realistically identified and addressed to seek resolution. Continuing to shout that “we don’t have affordable housing” and then point at the vast tracts of undeveloped land while the Ministry of Housing continuing to maintain that all but 3% of the land is available to it to develop for the public good (97% in private hands) just mushes up the issues.

  • einar
    28 July 2007

    Topic “du jour” (of the day) rather than “de jure” (by law)… 😀 (I’m just one of those pedantic lawyers, sorry to bother you! 😉

    Otherwise an interesting read… as usual!

  • mahmood
    28 July 2007

    I should learn French! Thanks very much einar, I’ll get it changed now. 😳

  • yvonne dettwyler
    28 July 2007

    Why OOPS Mahmoud? No shame, we learn every day something new.

    einar don’t know if you were/are aware during De Gaulles Presidency he forbade the French using English words, tainting the language. The Brits, typically Brit.humour came up with the question: General, what are we now to do we no longer allowed using the word RENDEZ-VOUS? 😀

  • ammar456
    28 July 2007

    Good topic; its important to notice that, although prices are simmering right now, if you have any money you can drop on a down payment for a property, DO IT. Prices are well on their way to boiling pretty soon. If you can’t buy something now, you sure as hell won’t be able to make it in the next 5 or 10 years.

    I’ve been watching the property market for the past few years; real estate tends to get very interesting, and whats happened here is just exciting. However, for a large part of the population that don’t own property yet, its just depressing.

    Thanks for the mention; I still have a lot more to discuss, including real-estate, investments, etc. Keep on the lookout 🙂

  • doncox
    28 July 2007

    Looking back, I realise that the big mistake I made was not saving right from the moment I started my first job. The result of having no savings is that you borrow all the money for buying a house, and end up paying far more in interest over the years. That money represents hours worked for nothing. ___I agree that it is best to buy something small first and trade up. The biggest success comes to those who are good at practical work and can make improvements to each property.

  • mahmood
    28 July 2007

    I learnt this the hard way after YEARS of living hand-to-mouth and buying anything and everything that takes my fancy. No thought of property, savings, whatever. And I was making pretty good money, but it comes in and by mid-month it has disappeared!

    I realise the mistakes now and it’s not too late. Once I realised the futility of my ways, I changed them and pretty soon I bought a house and the rest is history. Now I’m saving and investing to send the kids to good universities. We’re working on the thought that we will have to finance their complete education without sponsorship or scholarships but are pushing them towards that, so if it happens and they secure scholarships so much the better.

  • ammar456
    28 July 2007

    You can regret not saving from before, but thats not going to change anything; so do something positive and start today. We’re not exactly being given handouts by the government, so do everything like you’re not expecting to get a fils from them. If you do, great, but if you don’t, at least you’ve already planned for it.

  • mahmood
    28 July 2007

    Ammar this the pragmatic view that I share completely. Less dependence on government and more on ourselves will make us better and stronger and hopefully force the government to get smaller and concentrate on what it should do which is regulate rather than act as a geriatrics unit with plenty of handouts leading to a lethargic society at best.

  • blewyn
    29 July 2007

    Um…what’s the problem ? Bahrain has many properties, flats and houses…and plenty of empty land available for building. What housing problem ?

  • mahmood
    29 July 2007

    The affordability of such lands and houses is the problem, not their dearth.

  • alshayyal
    29 July 2007
    is the link to the film we did about Bahrain for AlJazeera International…
    it was cut to be far shorter than originally intended…
    please tell me what you think

  • Concerned 'CitizenX'
    29 July 2007

    Here’s my two cents, :mrgreen:

    Firstly, i don’t believe in buying flats, it’s just not an ideal situation.

    Secondly, the government brought this problem on to us by distributing land, without our knowledge and opening up the way for foreigners to purchase land anywhere they want to. That is big mistake, Bahrain is a small island and the residential lands should only be for used by Bahraini nationals.

    I’ve said this again and I’ll say it again, there are many projects around Bahrain in which foreigners should be allowed to own property i.e. Al Amwaj, Riffa Views and the lot. 😡

    Finally, a plot of land now costs three to four times more than what it did a couple of years ago. Building materials have become more expensive and even if one’s salary is over 900 diners, it’s still difficult. You’ll have to get a 10-15 year loan for the land and then another 20 – 25 year loan for constructing the miserable house.

    I’ve started saving for the last year now, but I’m still waiting to complete my useless personal loans before jumping in deep, I’m hoping for the best… 💡

    Sheesh, bad decisions by the Government and we have to suffer. 😳


  • Abdulkarim
    29 July 2007

    Good topic and nice read. I think the government did the right thing by limiting its subsidised housing to the most needy. I can only wish they do that for other things they provide below cost and that is a lot. The government spends about BD 400 million a year on subsidies and that is for everybody; rich and poor, national or not. If they drop the subsidies and opt for a system of income support, poverty would be eradicated almost over night and still the government would have money to spare.

    There is a housing problem and I shall not deny it but only because people are used to hands out from the government. They will wait rather than take a long term mortgage. In many countries it is the norm for people to take 25 years mortgage. In fact I hear in Japan they take a 100 years mortagage rather than weep at the Housing Minsitry like people here.

  • Ammar
    30 July 2007

    Unfortunately a large number of our people have gotten used to the lazy attitude of, don’t bother, just ask the government to do it for you. Everytime something goes wrong, they blame the government. Well, sure the govt has a certain liability towards sorting a few issues out, but don’t sit and scream and shout for them to just give you everything in the hand! If you spent all that effort on working harder to get more work and earn more money instead of demonstrating infront of the ministry of housing, labor, etc, we’d all be millionaires by now. I understand the govt may have cut us short in some issues, but we should take a stand and do something for ourselves rather than expend our energy into asking for it back.

  • CharlesWT
    4 September 2007


    Very good film. Thanks!

Damn, we didn’t get it