Dubai Municipality’s quota plan for new developments could be a boon to middle-income residents according to a Khaleej Times report.
A proposal by the Dubai Municipality to introduce mandatory affordable housing quotas for all new residential developments will be a watershed in Dubai’s booming real estate sector, while catapulting it into the next stage of its evolution as a mature market.
Affordable housing quotas, a regulatory step initiated by most developed economies, typically force builders to set aside a proportion of new building units, say 20 to 45%, as affordable homes for people who are otherwise priced out of the market.
The move will have far-reaching positive implications for the middle-income residents who are finding the current prices unaffordable for owner occupation, say market analysts.
“The issue of affordability has been one that has been quietly bubbling away in the background for some time,” said Steven Morgan, CEO of Cluttons Middle East. “The surging rents, driven by the exceptionally strong underlying demand, which was linked to the robust economic growth, meant that household finances were coming under tremendous pressure on several fronts.”