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According to a research conducted recently by the Core Savills consultancy, Dubai’s mid-priced properties are still not truly affordable for the middle class earners, despite of the widespread use of the term.
David Godchaux, CEO of Core, said: “We are witnessing a surge of off-plan properties which are being marketed as ‘affordable’ options. Some of these projects have tried to achieve the intent through innovative construction, marketing strategies and flexible payment plans, yet many don’t fit the economics of a lower income end user.”
In recent years, as portal imexre.com has continually reported, developers’ interest in Dubai’s affordable real estate sector has grown significantly. As a result the number of such projects in areas like IMPZ, International City, Al Furjan, Karama and even Dubailand has also increased significantly. This year alone, such major developers as Danube Properties and the market’s giant Dubai Properties Group (DPG) have launched their new affordable housing projects of impressive scale. For those looking for decent options in this housing segment imexre.com advises paying attention to such residential complexes as Serena, Al Waha, located along the Emirates Road in Dubailand, or The Ritz development near Ibn Battuta Mall in Al Furjan.
According to the definition given by the Dubai’s Municipality, the housing is considered affordable in case families with an income of AED 3,000 to 10,000 per month can afford buying it. However, the Core Savills research indicates that today it is difficult to find something cheaper than US $ 500 000 for the unit in the emirate. This means that, under normal mortgage conditions, buyers will have to spend more than 30-35% of their income on payments, thus making the term "affordable" invalid in this context.
To make off-plan apartments and houses truly affordable Dubai’s authorities intend to take a number of measures. In particular, a new law by Dubai Municipality for mandatory 15-20 percent affordable housing in all future residential developments may improve the situation in the near future, as well as another new law in the area of public-private partnership allowing developers to significantly reduce the cost of purchase of land for the affordable housing construction.
