Dubai South plans mid-market village in trend towards affordable homes
The property developer Dubai South is planning to build a Dh25 billion middle-income residential project near Dubai’s new airport as luxury becomes more difficult to sell amid an economic slowdown in the UAE.
The company, formerly known as Dubai World Central, said it would start to build the cluster of villages next year.
The proposed city, also called Dubai South, will be built on a total of 145 square kilometres of land near Al Maktoum International Airport.
A further three to five villages are envisaged in the near future, said Mohammed Al Awadhi, a vice president at Dubai South.
The idea behind the city is to build smaller housing projects and provide each of them with services such as schools, moving away from huge projects of the past that are served by one big hub.
“Usually, the expansive layout of a city compels many of us to spend hours every day, commuting to schools, workplaces, retail and wellness centres,” said Mr Al Awadhi.
“Not only does this increase stress, but the time could have been used in a more gainful way elsewhere.”
The first village, which will encompass 6,000 units ranging from apartments, villas and town houses, will be completed in 2019.
Pricing for units will be announced towards the end of the year, said Mr Al Awadhi.
In this country developers are moving towards more affordable housing as the drop in oil prices puts a damper on the economy.
Property sales transactions for high-end real estate has dropped, according to business executives.
Tirad Al Mahmoud, the chief executive of Abu Dhabi Islamic Bank, said during the summer that, despite the slowdown in the overall mortgage market, there is still healthy demand for what he described as middle-income housing.
“Demand for luxury housing costing more than Dh20 million has dwindled, while units up to Dh2m still had interest,” Mr Al Mahmoud said.
Over the past 12 months, demand for mortgages has slowed to single-digit growth from double-digit growth in the previous year as house prices become difficult to afford, banking executives have said.
Meanwhile, rents have been rising.
Housing rents in Abu Dhabi alone rose by 12 per cent last year and another 2 per cent in the first quarter of this year despite the oil price retreat, according to data from the property broker CBRE.
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Updated: September 8, 2015 04:00 AM