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Lower maintenance charges, affordable housing and a fall in prices are the latest factors affecting the UAE residential market. Dounia Fadi, CEO of Elysian Real Estate, explains the implications of these trends.
Notable change in trends
One of the major trends witnessed in the recent months is that investor and end-user interest in both the ready and off-plan segments has dropped.
However, as a result of the softening of prices and low interest rates, a slight movement away from off-plan real estate to ready properties is taking place.
Also, more natural real estate dynamics are taking over.
Location, amenities, access to schools, hospitals, public transport and retail, and spectacular views now play a very important role in property valuation.
Smaller property units have seen more demand and properties with lower maintenance charges have also somewhat become an important factor affecting trends in the real estate market.
Each emirate offers a unique set of circumstances to live in. Freehold property is still key to a vibrant real estate sector in any emirate.
Dubai remains to have a major advantage or a headstart in comparison to Abu Dhabi. But as a whole, Dubai offers a complete lifestyle and a new sub-culture which attract many expats.
These factors have remained a major advantage in the real estate sector. Dubai is one of the first choices for international investors to buy a second home due to these factors.
Abu Dhabi is getting there with the latest state-of-the-art projects happening on its islands.
The supply of quality housing projects in the capital is comparatively lesser than the demand. This disparity is being addressed through many novel projects which are shaping up everywhere, but it will take a few years to stabilise.
Sharjah and other emirates closer to Dubai are offering more affordable housing and rental alternatives. This has been the case for many years. Sharjah will have to work on developing more infrastructures to support its growing population.
Outside of Dubai and Abu Dhabi, the next emirate of choice is Ras Al Khaimah, with its beautiful beaches and well-thought-out freehold developments along the coastline.
Affordable housing is a very important issue for urban planning and social economic development.
The UAE needs to strategise the housing mix well.
If every real estate development is in the high-end segment, or if a property is expensive, what will the middle class do?
For any economy, market or society, a vibrant middle class is extremely necessary to sustain it.
The affordable housing planned in Abu Dhabi will be a step in the right direction. Hopefully, Dubai will consider that as well.
Changes in 2016
The market is experiencing a price fall because of low oil prices and market volatility extending from China all the way to the US mainland.
The year 2016 will be challenging for world economies and that will have an impact on the UAE as well.
The purchasing power has not increased due to the rising living costs and the uncertainty in job issues.
As inflation in the UAE tends to outpace salaries and savings, the buying power really has not changed much.
Buyers are actually looking for value for money and; hence, a strong demand for affordable housing is there.
In my opinion, the top development to look out for in the near future is Emaar’s Dubai Hills for its location. Damac AKOYA will be a good community because of the golf course and the beautifully designed villas.
So will the Dubai South projects with their rent-to-own schemes.
New developers are the one to look out for in the near future as they are expected to offer high-standard quality buildings and finishing, giving the term “luxury” a real meaning.
Affordable housing options in UAE
• In Dubai, MAG 5 is a new affordable housing plan which is being built in Dubai South, formerly Dubai World Central. The first phase will consist of over 1,000 mid-rise apartments to be built by 2018, with prices starting from Dh499,000 for a one-bedroom unit.
• In Abu Dhabi, Aldar Properties launched Meera in Shams Abu Dhabi on Reem Island last June to address affordability issues. By the end of the year, the Abu Dhabi Urban Planning Council will be implementing a new policy that will set affordable housing plans.
Source: Zenifer Khaleel, Special to Freehold