Affordable housing is set to gain traction in the UAE as property developers shift their focus to this segment by targeting the middle-income population in a bid to double their share in total real estate projects by 2022, experts say.
Latest data show that the UAE is the second-biggest market for affordable housing in the GCC as it requires 98,000 units by 2022 to cater to the needs of the middle-income group, those earning between Dh15,000 to Dh30,000 per month. However, a gap in the market still exists for households earning less than Dh10,000 monthly, offering a huge opportunity to developers to invest in the affordable segment in line with a new housing policy announced by the UAE government to provide better options to residents.
Industry experts said about 63,000 units are likely to be delivered in Dubai this year ahead of Expo 2020, approximately only 12,000 of which will be classified affordable. However, this segment will pick up momentum in the next three years as developers are expanding their development portfolio to cater to the huge demand from middle-income groups.
According to the latest report by Property Finder Group, there is an increasing number of projects dedicated to middle-income classes. However, in the home-ownership market, less than 20 per cent of middle-income projects are affordable to households earning less than Dh15,000 per month.
"Affordable housing allows for continued growth, development and competition, while providing an element of long-term market stability and sustainability," said Muhammad BinGhatti, CEO and head of architecture at BinGhatti Holding.
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