Property

‘Strong demand’ for cheap Dubai homes as property prices drop

There is ‘pent-up demand’ for affordable homes in the emirate, says Asteco report

PHOTO: Dubai villa and apartment sales prices fell by 2% and 3% respectively in the first three months of the year, a report has found. Credit: Asteco

There is ‘strong demand’ for affordable homes in Dubai as prices in the overall property market decline, an Asteco report has found.

The real-estate services firm found that villa and apartment sales prices fell by 2% and 3% respectively in the first three months of the year, as part of a continuing decline in the emirate’s property market.

There is however a healthy market for cheaper properties, with “strong demand witnessed for nearly 2,000 affordable homes” during the period, the report noted.

“Renewed focus on Dubai’s potential and possibly pent-up demand for affordable housing is spurring local government, investor and developer activity,” Asteco said.

It pointed to Dubai Municipality’s move to allocate over 100 hectares of land to developers to build affordable housing for rent, aimed at those earning between AED 3,000 and AED 10,000 per month.

It also cited the Town Square development by Nshama, where a three-bed property is available from Dh1 million ($272,000), and Damac’s Akoya Oxygen project, as examples of developers targeting more affordable segments of the market.

“Value-for-money has become more important than property prestige, and with a noticeable decline in buyers from Russia and the CIS countries, due to the worsening economic situation,” noted John Stevens, managing director at Asteco.

“This is prompting new opportunities, and we are seeing more GCC investor interest in reasonably priced properties, led by Saudi Arabia and the UAE, including off-plan projects specifically designed for investors.”

There was a 35% year-on-year decline in villa transactions in the first quarter of 2015 due to the new supply in the market, the report noted.

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