Dubai unveils low-cost homes

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 marginalized 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 in an 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 property.

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 adapt to upper income groups and high net worth 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 property - which prompted the government to cap rents in recent years.

In Dubai property government investment in housing schemes in 1960s and 1970s, has seen the development of large numbers of settlements in Satwa, Karama, Ghusais and Deira, which have helped people in those days.

However, due to the sudden growth in the free market in 2002, major developers focus shifted from the market transition to a free rental sector, while demand continues to grow, pushing rents historical highs.

At the same time, most of the government-built low-cost housing colonies and villages were destroyed, reducing housing options for low - and middle-income countries.

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 property."