Residential sales prices in Dubai may continue to soften by between 1-5% in the first half of 2015, before stabilising in the second half of the year, Deloitte said. An array of factors are influencing prices in Dubai, whether it be in free zones in the emirate or in the traditional residential neighbourhoods. “This is driven in part by an increase in new supply as well as a general reluctance on half of [the] residents’ [part] to pay more,” said Matthew Green, Head of Research and Consultancy at CBRE Middle East. A third reason is that most landlords have already raised their hikes to be in line - or even above - the rental index overseen by the Dubai Land Department. If the rental on a property is broadly in sync with what is there for that particular neighbourhood as shown on the index, landlords have little room left to ask for more. However, the one thing that's become apparent is the increasing demand for affordable options. Now, even Gulf investors are taking an interest in middle income housing options in Dubai, according to a report by Asteco. If the change becomes more pronounced from current levels, it could have an impact on luxury off-plan launches. With UAE developers rolling out affordable housing projects, a mortgage provider is now working to deliver a home finance product for residents earning AED10,000 a month. Abu Dhabi Finance (ADF) is in talks with some of the major UAE property developers to offer mortgage to units in affordable housing projects. “The demand for affordable housing from middle income families, particularly in Abu Dhabi, is huge. The capital is a very attractive place to live, but the cost of housing, particularly rentals, remains high and affordable housing stock for sale is relatively low,” said company Chief Executive Officer Chris Taylor. Clearly, more developers are now turning their attention to meeting the demand for affordable housing. In fact, more launches are expected in the next 12 months that target the middle market segment, according to Adam Wisher, head of Development Advisory and Real Estate Research at Cavendish Maxwell.