As many Dubai analysts have foreseen, Dubai's real estate affordable segment keeps expanding. And the expansion goes south, literally, meaning the rapid expansion of one of the biggest Dubai affordable areas — Dubai South. Another project of this kind in the growing ‘city within a city’ community was recently launched by MAG 5 developer. And now, after no more than a week, it reports about 50% of the total stock set for sale in MAG 5 Boulevard being already sold out.
This is not a surprise at all, for the developer was able to cut the price for residential units in MAG 5 Boulevard to a minimum of AED499,999 for the smallest apartment. Despite the fact, that the developer is relatively new to Dubai’s residential market sector (this is its first residential project), property buyers have entrusted their investments to the developer without a moment hesitation. Besides, MAG 5 Boulevard is also the first residential project launched for sale in Dubai South.
Talal Moafaq Al Gaddah, CEO, MAG 5 PD said: “We received an incredible demand for this project with Phase 1 of MAG 5 Boulevard — a development that is targeted towards those earning between AED25,000-30,000 per month.”
The whole community at MAG 5 Boulevard in Dubai South will consist of 13 buildings, with about 1,700 apartments being marketed now. The project’s first phase delivery is scheduled for the fourth quarter of 2018.
It should also be noted that, despite the low price for apartments, MAG 5 still isn’t ahead of the game in this market segment. Affordable apartments at an unprecedented price (AED 280,000) were offered by Dubai market’s giant Damac in The Pulse project before; and earlier Danube had been selling affordable units in its Starz development near Al Furjan, with prices set below AED 450,000 for studio apartments. Experts say, local developers managed to set price tags these low due to to the reduced value of land in peripheral Dubai areas, as well as due to the apartment’s size cuts.
However, despite prices being very attractive, experts warn against investing in the most affordable real estate units, if long-term yields is what you're waiting for. Underdeveloped affordable housing areas with poor infrastructure won’t get you high capitalization percentage in the nearest future, especially given the growing number of such small-sized property in Dubai.