Dubai's private developers have recently announced that erecting low-cost housing was not their first priority. High land rates in the emirate have prevented them from taking up low-range housing projects. Based on Ahmad Al Abdullah, chairman of New Dubai Properties that has constructed 22 projects worth over $7 billion throughout the emirate, high land rates are pushing developers into projects that concerned building luxurious apartments, office blocks and Dubai hotels. These restore far better returns as compared to what the affordable housing might deliver. There's already lack of three and 4 star hotels in Dubai that many construction companies are trying to make business from. Nobody dares launching low-cost housing projects however though.
Based on numerous estimates 40% of the project amount is normally required for buying lands while the rest goes into starting construction plans. This means low-cost housing in Dubai may never be profitable in the present-day scenario. You will find only four apartment blocks aside from twelve commercial towers and six Dubai hotels that New Dubai Properties has built so far. Dubai's government has failed in checking down its land rates up to now, therefore leading to inflation in the real estate market. This has likewise affected the market of affordable hotels in Dubai in a detrimental way. There is no scarcity of the costly hotels in Dubai on the other hand though, and many native and offshore players are lining up to build many new five star hotels in the emirate.
Costly real estate prices in Dubai is why many individuals decided to live at Sharjah and spend up to three hours traveling down to and up from Dubai on a daily course. While Dubai hotels and furnished apartments might be the right place for high-flying executives, CEOs and holidaymakers to reside, there are many who still cannot afford to have accommodation in apartments or hotels in Dubai. Governmental efforts of encouraging low-cost housing projects have always stood non-starters. The need of having the largest, tallest and the most advanced infrastructure has increased Dubai's price enormously. While it may reveal a boom time for the tourism sector, there are lots of who'd believe otherwise. The need of saving cash to send back home might not allow many expatriates to purchase accommodation in today's situation, therefore they have to move elsewhere facing big scale obstacles.
Dubai's government will have to discover a way of having a balance between lavish and affordable housing projects. A segment of the free land should be given away at low rates to make this reality. It shouldn't be ignored for too long, because a big expatriate workforce keeps arriving at Dubai on a daily basis. There's a fear; the lack of inexpensive housing may slow down the region's overall growth. More and more expatriates are finding it hard to purchase accommodation in Dubai today. Some construction firms have already moved away to other areas within the UAE with an aim at getting low-cost housing developments there. This has a potential of inflicting Dubai's economy seriously unless checked by the authorities quickly.