By Shane McGinley
CB Richard Ellis chief says idle buildings should be 'put back on the market'.
While Dubai is facing an oversupply of real estate, there is still a shortage of affordable housing in the emirate and the Dubai government should look to do more to address the situation, according to the head of a Dubai-based real estate consultancy.
“There is a shortage of affordable housing,” said Nick MacLean, managing director of CB Richard Ellis said on Monday at the Second Arabian Business Conference in Dubai.
“The cost of land is the biggest problem. Land is one of the worst affect asset classes at the moment but if you revisit those numbers it might work but they need the government to kick start it,” he added.
Maclean said that the government needs to more to address the situation and “exercise its compulsory purchase powers,” and put idle buildings “back to the market wherever there is demand and a lot of that is coming from the affordable housing.”
It has been estimated that 40,000 units are expected to enter the Dubai market this year and prices have fallen by up 60 percent from the boom years. MacLean believes Dubai is likely to remain the main hub in the Middle East but is set to become the “Basildom of the GCC and is the dormitory town of the region.”
“The concept is people will live and work here… and the primary market it is serving is Abu Dhabi,” he added.