Properties priced at under Dh1.5 million become affordable for many residents living in the UAE, which could lead to many of them laying down deeper roots.
Affordable Dubai homes will keep residents in UAE for longer, says expert
New homes aimed at the affordable end of Dubai’s property market are widening the pool of potential buyers, making it “a good time to invest” despite falling prices, according to one expert.
Speaking at the launch for this year’s International Property Show, Land Sterling’s managing partner Abdul Basset Betraoui said that affordable housing “is something that we’ve seen really kick off” over the past 12 to 18 months, with schemes from the likes of Danube Properties and Nshama attracting attention with low-entry price points.
“The affordable market has its own clientele,” he said.
“Suddenly, in the last year and a half, you’ve got 50 per cent of people working here who are able to buy, whereas prior to that, you’d find only 5 to 10 per cent.
He said that properties priced at under Dh1.5 million become affordable for many residents living in the UAE, which could lead to many of them laying down deeper roots.
“When you have Filipinos, Indians and working-class Arabs who are on salaries of Dh10,000 to Dh15,000 with an opportunity to buy a property here, you’ve just ensured they stay here for another 15 to 20 years, whereas previously money that would have gone back to their countries and they would have planned a different future.”
Recent research by property analysts in Dubai have typically shown double-digit declines in the value of Dubai residential properties in 2015, but there is less consensus over the direction in which the market is heading.
Phidar Advisory is forecasting a further 20 per cent drop in prices over the next two years, and JLL is predicting a fall in prices of 5 to 10 per cent by the end of this year.
Deloitte’s real estate advisory arm also predicted a fall, but the data providers Reidin and ValuStrat have both argued that the market has shown signs of bottoming out in recent months.
Mr Betraoui’s own firm’s research for the fourth quarter of last year indicated a 4.8 per cent decline in apartment prices and an 11 per cent fall in villa prices last year.
Despite this, he said a dip of 4 per cent or so over the next 12 months will not make a great difference to someone buying an affordable apartment for about Dh430,000.
“Dubai is providing a platform for the working class to be more stable. We’ve seen Danube sell out not once, but several times. [Ritz by Danube] is their fourth project that has sold out within a week. These guys have found their niche in the market and are catering to their requirements.”
Danube Properties said that Ritz by Danube, which was launched at the end of December, had not quite sold out yet, but 85 per cent of the 450-unit, Dh300 million project in the Al Furjan district had been bought.
“Our experience over the last one-and-a-half years of project launches has strengthened our conviction that if you have the right project at the right location and offer them to customers at a convenient payment plan, you can’t go wrong – despite market conditions,” said the chairman Rizwan Sajan.
This year’s International Property Show takes place from April 11 through 13 at Dubai International Convention and Exhibition Centre.