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The affordable housing segment has turned into a lucrative niche segment catering to the needs of the low and middle-income earners. Focusing more on innovation, technology, sustainability and affordability, this new trend would address the large and severely underserved affordable home ownership market.
Major players in the housing and realty sector are now venturing into the affordable housing segment to meet strong demand. Developing such projects, the industry's hottest growth sector promotes the concept of shared value, where the developers do business, combining profitability with advancing the socio-economic status of the different classes of society.
The affordable housing segment is a potential growth area, especially after the strong recovery of the global real estate industry in the post-crisis era. However, the market still faces undersupply of housing for the lower and middle income segments of society. There is a huge demand for affordable housing all over the UAE.
The low-cost housing real estate segment, which has been underserved for years, generally requires massive expansion. Now the segment is likely to get more attention, as youthful populations strive for home ownership and the demand has increased considerably for low-cost housing.
The obstacles, however, are many for the industry to meet the huge demand. The increasing cost of building materials often restrains the construction of affordable housing projects; however, the cost could be overcome with the application of modern technology. Delivering the required number of projects to meet this growing demand constitutes one of the major opportunities for the real estate industry in the region.
As the economy is picking up and population growth continues, developing lower grade properties will increase the options of people. This will also contribute to the diversification of the economy and upgrade of infrastructure. However, the actual impact of developing such projects depends on their successful implementation in order to meet rising demand. It is crucial for the market to accelerate the delivery of affordable and middle market housing over the short to medium term to satisfy current demand.
• Affordable housing segment caters to needs of low to middle income earners
• Major players in housing, realty now venturing into this segment to meet demand
• Developing lower grade properties will increase the options of more people
Source: Yash Shah, Special to Properties
The writer is Property Sales & Leasing Manager, SPF Realty