May 13 2012 |
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Algeria invites global developers to ease housing shortfall
By Radia Tunsi
A presidential program aimed at alleviating the housing crisis in Algeria will see about USD 18 billion spent on building 2.4 million homes by 2014 as part of a five-year plan initiated in 2009. According to officials in the ministry of housing and urban affairs, Algeria needs 1.2 million housing units to meet the current shortfall.
The plan to build 2.4 million housing units will eliminate the housing crisis through the completion of one million rental public units, 900,000 rural units and 550,000 state-aided housing units.
Algeria has invited construction companies from across the world to participate in its housing initiative. UAE, Turkish, Chinese and European companies have bid for the projects, with the Turks and the Chinese among the most active.
Chinese companies have been involved in constructing a residential complex in Tiaret province in the west of Algeria, as well in building the new city of Hassy Messaoud in the oil-rich Ouargla province in southern Algeria.
A shortage of housing units has led to real estate prices in Algiers, the capital, and some major cities witnessing exorbitant increases, placing a heavy burden on the middle- and low-income citizens. According to Algerian Federation for Real Estate Agencies vice president Abdul Hakim Oweidat, the price inflation is a result not only of low supply but also bureaucratic obstacles.
The shortage of property all over the capital has led to the demolition of colonial-era villas and reusing the land for residential projects.
President of the Algerian Association for Expert Architects, Abdul Hameed Bu Dawood, said Algeria's housing problem is closely related to the shortfall and consumption of the residential units in most of the administrative districts. Citizens are forced to rent houses at high rates.
Home Loans
In order to overcome the shortfall, the government has started offering home loans at low rates of between 1% and 3% through public as well as private banks.
The total value of loans granted during 2011 reached DZD 200 billion, an annual growth rate of 25% over 2010, according to the General Commissioner of the Association of Banks and Financial Institutions, Dr. Abdul Rahman Bin Khalfa.
The Algerian Minister of Finance, Karim Djoudi, has said clearly that the government will not give developers state-owned land at low prices.
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