Dubai unveils low-cost homes

Dubai: Dubai Properties is to roll out 50,000 low-cost housing units in the coming years, a top official said - which could help the growing housing problem for the emirate's gradually marginalised middle income groups.

"These affordable housing projects will be a mix of freehold and rental units," Mohammad Bin Braik, chief executive of Dubai Property Group , told Gulf News in an exclusive interview. He, however, could not give the indication of the mix.

"We have already built a sizeable housing project in Al Quoz area that will soon be offered on rent," he said.

He did not elaborate his plans for the housing schemes, just adding that the announcements will be made in due course.

The first announcement is expected this year.

These will be in addition to the 160,000 residential units that are being built - mostly for the upper income groups - in Dubai.

This comes as a good news for the emirate's 1.44 million population, a large number of which stays in Sharjah and Ajman for cheaper alternatives.

Most of the current projects cater to upper income groups and high networth individuals, creating a large imbalance in the emirate's housing market.

House rent and traffic continues to dominate the list of public worries in Dubai - which prompted the government to cap rents in recent years.

The Dubai Government's investment in housing schemes in the 1960s and 1970s, saw the development of a large number of settlements in Satwa, Karama, Ghusais and Deira that helped the population during those times.

However, due to the sudden growth in the freehold market since 2002, large real estate developers shifted focus from the rental market moving to freehold sector, while demand continued to soar, pushing rents to historic highs.

At the same time, a large chunk of the government-built colonies and low-cost housing settlements have been demolished, reducing housing options for the low- and middle-income groups.

Nakheel , the other government-owned developer, has set up International City - perceived to provide affordable housing.

The current high rents are good enough for developers to return to the rental market. "Investors will return to the rental market when income rises to the same level as that of the freehold market," said a top property broker.

Bin Braik said, "Although we are mostly engaged in built-to-sell business, rental units gives us a continuous flow of guaranteed returns and provides us the necessary stability. We are not only building assets, we are also building values for Dubai."