Housing ‘Worries’: Rising Construction Costs Alarm Bahrain’s Real Estate Sector

TDT | Manama
Email : editor@newsofbahrain.com

Real estate developers and industry professionals in Bahrain are raising concerns about a looming crisis in affordable housing due to soaring construction material costs.

The construction sector is grappling with sharply rising prices for essential materials such as gravel and bricks. Industry leaders warn that these escalating costs are threatening housing affordability.

Jasem Mohammed Kadhem, CEO of Dar Al Sultan Real Estate, highlighted a growing disparity between available financing and market prices, which is hindering sales despite strong buyer interest.

“The price of ready-mix concrete has surged due to shortages, further increasing the cost of new housing units,” Kadhem stated. “This casts a shadow over the entire real estate development sector.”

He urged financial institutions to expand lending options and raise financing limits to reflect current market realities.

Impact on Low-Income Families

Kadhem expressed particular concern for low-income families, noting that even with existing housing programmes, the cost of the most affordable units now exceeds BD125,000. This far surpasses the BD100,000 financing cap available to many families.

Additionally, the high cost of land remains a significant barrier. For example, small plots in Al Hamla now cost up to BD70,000. While alternative programmes such as land purchase assistance exist, these do not fully address the housing crisis since families must still invest in construction.

Construction Price Hikes

Another developer, who wished to remain anonymous, confirmed widespread price hikes, including:

• A BD2 per square meter increase in concrete costs (from BD5.5 to BD7.5).
• A 30% rise in ready-mix concrete prices, amounting to an additional BD12 per cubic meter.
• A 50% increase in brick prices.

These increases, deemed unjustified by some experts, are impacting not only social housing projects but also around 30 other sectors dependent on construction.

The developer also reported a 20% rise in overall construction costs, with basic construction costs climbing from BD85 per square meter last year to over BD100 today.

Calls for Action

The escalating prices have created a pessimistic outlook, with developers pointing to a black market for ready-mix concrete and delivery delays of up to 10 days. These delays force contractors to rent formwork for extended periods, further driving up costs.

Developers are urging the Ministry of Housing and Urban Planning to conduct a comprehensive study and adjust housing finance limits to reflect the increased costs. Without timely intervention, they fear that many low-income families will be priced out of homeownership altogether.