Market becoming realistic about prices

Emaar Properties, developer of the world’s tallest building, is in talks with several UAE emirates to roll out affordable housing schemes and plans to concentrate on Dubai’s low cost housing sector.

Developers were caught in the frenzy of those heady days and could not think beyond making anything they wanted to build into the "tallest", "longest", "largest" and any other stretching of the imagination one can think of. But, at the same time, there are quite a few that have made the transition from the drawing board to being homes with all the creature comforts provided, swanky offices, or malls that are nothing less than shoppers' paradises.

Richard Paul, Associate Director at real estate consultancy Cluttons says, “Due to the pressure of oversupply the market still faces the same downward pressure on rents seen throughout 2010 caused by the general oversupply of new space."

The Dubai-listed developer Emaar launched a division to build value housing across the Middle East and North Africa, opening up a potentially lucrative new revenue stream. “Value housing in the UAE is needed, value housing in Saudi Arabia is needed. But value housing in the UAE is a completely different concept,” said Alabbar. The cost range for properties in the wealthy Gulf state will be higher than those in comparatively poorer Arab states such as Egypt, he said.

The Middle East and North Africa has an estimated affordable housing shortfall of 3.5 million with nearly half in Egypt. High land prices coupled with the cost of infrastructure, limited home finance to low-income households and poor financial returns have all contributed to the region's severe shortfall in midmarket housing.