Affordable homes still a minority in Dubai, despite push

The extension of the Dubai Metro’s Red Line will be critical to build up momentum behind Dubai’s affordable housing initiative, whether it be government-led or driven by private developer initiatives.

Such a move will open up “options for middle-income families to own and rent properties with metro access in projects around the Dubai Investment Park, Gardens, Discovery Gardens and IMPZ (International Media Production Zone),” says a report on mid-income housing possibilities brought out by JLL, the consultancy.

“Further enhancements to the public transport system are needed to access areas in the outer part of Dubai, between Mohammad Bin Zayed Road and Emirates Road as shown on the map.”

As per JLL estimates, 39 per cent of UAE’s households fall in the mid-income category, earning between Dh10,000-Dh30,000 a month. This resident base can, JLL reckons, optimally set aside up to Dh72,000 annually on rental or afford a home in the range of Dh790,000. (These are on estimates that a household should not spend no more than 30 per cent of its gross household income on housing.)

But only 22 per cent of the units released (around 19,500 as per JLL’s reckoning) in the year to date can be described as being fit for a mid-income budgets. These include the Town Square by Nshama, Glitz 3 by Danube, MAG 5 by MAG and Remram (phase 2) by Dubai Properties Group.

As of now, “[the] only options for purchasing existing housing for less than Dh790,000 are in Arjan, Discovery Gardens, IMPZ, Liwan and Dubai International City, which are all at a distance from Dubai’s central business district,” the JLL report adds.

There was an announcement earlier this year from the Dubai Municipality that requires 15-20 per cent of new projects to be targeted at middle-income earners. However, further clarifications are awaited.

According to Craig Plumb, head of Research at JLL Mena, “We believe there is a need to re-think the existing relationship between government and the real estate development industry to create more affordable housing that middle-income families can afford. We also recommend more innovative planning and design initiatives to create more attractive, environmentally sustainable and cohesive communities as well as accessible financing, empowering middle income families to take a stake in their future.

“Developments such as Nshama’s Town Square show that private sector developers are able to deliver affordable [products] for middle-income households in the UAE. Elsewhere in the region, timely government initiatives such as the launch of the Saudi Arabian Ministry of Housing‘s ‘Eskan’ project should result in progress towards the supply of 500,000 affordable units. In Egypt, both Arabtec and Orascom are also contributing significantly to the need to provide more affordable homes.”

Source: Manoj Nair, Associate Editor,


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