Is affordable luxury the answer for Abu Dhabi's property market?

Exhibitors at Cityscape Abu Dhabi, which takes place in the UAE capital next week, have identified the emirate’s emerging trend for affordable luxury housing to solve a disconnect between developer preferences and buyer demand.

The trend, say industry experts at Cityscape Abu Dhabi, which will run at Abu Dhabi National Exhibition Centre from April 16-18, could see the capital’s real estate landscape veer away from ultra-luxurious vanity projects to more affordable homes that are stamped by build quality.

Global real estate services provider Savills said the Abu Dhabi scenario is not unique to the region and could be a weathervane of things to come.

“There are currently some challenges in the real estate market that are not limited to the region and should not be looked at in isolation. Irrespective of the overall sentiments, projects that offer the right product at the right price are finding favour with the buyers. This highlights that there is sustained demand for good quality real estate,” said Steven Morgan, CEO Savills Middle East.

“The real estate market is still facing a mismatch of demand and supply. Developers focus on luxurious projects and the numbers of such accommodation is steadily increasing when the real demand is shifting towards affordable housing,” he added.

Dubai-based Binghatti Holding said developers could be missing a trick and losing out on increasing demand for more affordable yet quality accommodation if they fail to adapt.

“The Abu Dhabi real estate market has gained a lot of attraction from investors interested in low price inventory due to higher expected yields and flexible payment plans offered by developers, so it is a ‘buyers’ market,” said Muhammad Binghatti, CEO and head of architecture, Binghatti Developers.

The company, said Binghatti, is looking to “redefine the regional norms by delivering reasonably priced high-quality products and services in a timely manner.”

Binghatti, which operates 40 projects valued at more than AED3.5 billion, throughout Dubai including Business Bay, Dubai Silicon Oasis, Dubai Marina, Jumeirah Village Circle, Liwan, and Dubailand Residence Complex, is now turning its attention to the UAE capital.

It plans to launch its Dubai-based Binghatti Gateway’ project to local and international investors at Cityscape Abu Dhabi.