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The affordable housing segment is gaining momentum in the Dubai realty market. The specific property segment takes care of the middle-income group. A slew of projects dedicated to such group has been announced recently.
Several developers are bringing value homes at attractive price points in key emerging markets across the MENA region. Statistics show that there is a surge in demand for affordable homes in these markets as the population grows, and the shortage of over one million homes should be addressed by the year 2018.
The affordable housing sector has turned into a lucrative niche segment catering to the needs of the low and middle-income earners. Focusing more on innovations, technology, sustainability and affordability, this new trend is expected to address the large and severely underserved affordable home ownership sector.
Major players in the housing and realty sector are now venturing into the affordable housing segment to meet the strong demand, with a commitment to achieving sustainable urbanization in businesses.
In developing such projects, the industry's hottest growth sector promotes the concept of shared value wherein developers do business combining profitability with advancing the socio-economic status of the different classes of society.
Several real estate developers have gradually shifted their approach from high-end luxury residences to budget segment homes, which were earlier neglected.
Developers have also realized that budget homes are low on both construction and maintenance costs. Houses in this segment are traded to offer good quality housing to meet client expectations.
The industry is facing many obstacles in meeting the huge demand. The increasing costs of building materials often restrain the construction of affordable housing projects; however, the costs could be overcome with the proper use of modern technology.
Delivering sufficient projects to meet the growing demand constitutes one of the major opportunities for the real estate industry in the region.
The affordable housing segment has a huge potential, especially after the strong recovery of the global real estate industry in the post-crisis era. However, the market still faces an undersupply of housing units for the lower and middle-income segments.
There is a huge demand for affordable housing and special packages in several parts of the world. The issue of shortage for affordable homes has been neglected until recently. With the trend for affordable housing on the upswing, developers are seeing positive results in terms of booking in that segment.
The low-cost housing real estate segment requires massive expansion.
Now, the segment is likely to get more attention as the young population strives for homeownership.
According to local realty experts, properties in the price range of Dh400 to Dh600 per square foot fall under the affordable housing category.
As the economy is picking up and the population growth continues, developing affordable properties will increase options for 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 the rising demand.
It is, thus, crucial for the market to accelerate the delivery of affordable and middle market housing over the short to medium term to satisfy current demand.
Read more on making affordable housing a possibility in Dubai
Source: Yash Shah, Special to Freehold
The writer is Sales Manager - SPF Realty