MP calls for higher housing loan cap

Mohammed Darwish

A call to raise Bahrain’s housing loan ceiling from BD80,000 to BD120,000 has been made by MP Jalal Kadhem, who says the old cap no longer matches the cost of homes faced by Bahraini families.

The draft law put forward by Mr Kadhem would amend Decree Law No 10 of 1976 on housing by adding a new article on finance for buying or building a home.

Under the plan, applicants would receive a loan based on their monthly income, with a floor of BD80,000 and a ceiling of BD120,000. The money would be offered through the Housing Bank as one loan meant to meet the needs of the family.

Mr Kadhem said the change was needed after housing applications passed 48,000, a figure he said showed the strain on citizens seeking a suitable home.

He said Bahrain’s constitution gives citizens basic rights, including proper housing, and that the state must play a fuller role as property prices rise.

Schemes such as Tas'heel, Tas'heel+, Mazaya and Land and Loan had helped families, he said, but were no longer enough. Homes on the market now range from BD120,000 to BD160,000, far beyond the reach of the existing BD80,000 cap.

That gap, he said, had pushed many families into taking extra loans from several banks, adding to their debts. Some wives had also been brought in as co-borrowers on housing loans, placing further strain on households.

Mr Kadhem said the state should take full charge of housing finance by raising funds from banks and giving the Housing Bank a larger role, allowing families to deal with one lender and one loan.

He said many rules on housing finance date back to the 1980s and questioned why the BD80,000 cap had stayed in place for more than 35 years despite sharp rises in the property market.

Keeping the old ceiling, he said, no longer made sense and needed review.