If you’re finding housing prices in the UAE are too high, you’ll be pleased to hear that His Highness Sheikh Hamdan bin Mohammed bin Rashid Al Maktoum, Dubai Crown Prince, has approved a new low-income housing policy.
The housing policy will be aimed at both Emiratis and expats. The programme will work alongside real-estate developers to encourage the building of more housing units for low-income families. It consider income levels, place of residence and public benefits and compare these things with the requirements challenges that families are facing.
To put affordable housing issues into perspective, a small studio apartment in International Media Production Zone at AED 38,000 would match a one-bedroom apartment in Sharjah, leaving many residents no option but to leave the city and face a long commute just to save some cash.
And a study by Reidin/Global Capital Partners conducted in December 2016 found that, although housing prices had fallen, many less expensive properties still sport a price tag around the AED 1 million mark.
That flies in the face of real estate firm Core Savils’ definition of the term ‘affordable housing’, which should be considered as housing that can be paid for with an income of between AED 3,000 and AED 10,000, according to a research paper from the company. To live in a house which is deemed affordable, those paying for it should spend no more than 35% of their salaries on it a month, the paper said.
Certainly this wouldn’t work with some developers’ affordable housing projects. MAG5 claims to be developing ‘affordable’ housing, but charges a minimum of AED 500,000 for a one-bedroom apartment – a price near-impossible for low-income residents to consider as an option.
However, other developers seem to be keen to develop more affordable housing. Chairman of Danube Group, Rizwan Sajan, states that the demand for affordable housing will only keep getting higher. And given that demand, it seems like there is no better time for this policy to come about.
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