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International real estate consultancy, Cluttons, welcomes the announcement by the Abu Dhabi Urban Planning Council to decisively address the capital’s affordability challenges.
Like Dubai, the lack of what is classed as affordable stock remains limited and has, as a result driven tenants and buyers into markets on the peripheries of the city.
At Al Reef for instance, year on year rents jumped by almost a third as tenants were drawn in by the relatively affordable annual price tag of Dh 125,000 for a three bedroom villa, which compares to Dh189,000 for three bedroom villas elsewhere in the city’s residential investment zones.
In order to truly tackle the problem of affordability, it’s important to run the numbers. When you consider that an average expat household aspiring to purchase a home has to contend with an average annual rent of Dh 204,000 against an average household income of Dh199,000, the problem of the lack of affordable housing in the UAE capital is incredibly clear, especially when you factor in the 34 per cent increase in average house prices since 2010.
Source: Property Weekly