CITYSCAPE: UAE needs more affordable housing

Developers at Cityscape have called for more government assistance to create viable affordable developments

Experts at Cityscape have said the UAE has a massive requirement for affordable housing, saying more creative solutions are needed to make such projects viable.

Real estate professionals said that low profit-margins were discouraging developers from investing in developments that were more accessible to those with lower incomes.

“This has to be kick-started with government assistance since it could have a beneficial impact on the region as a whole,” said CBRE Middle East managing director Nicholas Maclean, saying the group had looked at low-cost housing developments but had found “it was difficult to make the numbers work”.

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Other professionals said the only possible way for affordable housing to be an opportunity in the region was for the government to provide land to developers free of charge.

“If the land is not provided free, it is just not viable,” said Alaman Group’s Mohammed Al-Ali, emphasising that development of the sector should be treated as a quasi-social service, introducing methods such as BOT (build, operate, transfer) in new private/public partnerships.

Aqaba Development Corporation CEO Imad Fakhoury cited the example of the Jordanian government. “To make this work, first you have to analyse incomes, cost out the affordability of mortgage payments, and then come up with your costings,” he said. “The government has provided land almost free of charge, extended credit and worked to bridge the interest rate challenge – as well as supporting private developments by buying in to these schemes to provide accommodation for government employees.”