Dubai needs more mid-market real estate developments to attract wider range of investors and home-buyers, according to a property developer in the UAE.
ZāZEN Properties says Dubai-based real estate developers must place a greater emphasis on mid-market customers.
The city is the 18th most expensive in the world for expats, but the growing population are not all millionaires and need affordable property, says the real estate firm.
Affordable property in Dubai
With historical data indicating that 64 per cent of all property purchases in the emirate are under the AED 3m ($817,000) threshold, and developers increasingly launching luxury projects amid the UAE’s ongoing real estate boom, supply imbalances could arise if this course is not corrected.
Although many expats are beneficiaries of the UAE’s tax incentives and yield higher earning potential than they would by working in other countries, the fact remains that the mid-market segment must not be neglected, says ZāZEN Properties.
Dubai’s rank as the 18th most expensive city for expats to live and work in, alongside factors such as the country’s diverse array of nationalities and these residents’ widespread income levels only reinforces this notion.
It was reported that 32.5 per cent of adults in the UAE in 2019 had a net worth of less than $10,000 while 44.8 per cent of residents had a wealth range between $10,000 and $100,000.
On the other hand, 21.2 per cent of the population boasted between $100,000 to $1m in wealth while only 1.6 per cent of people had more than $1m dollars.
While migration from overseas has been on the rise since then, and Dubai is on pace to be one of the 20 wealthiest cities in the world by 2030, these figures exemplify a discrepancy between wealth levels to emphasise the need for mid-market developments.
Sectors such as advanced technology, artificial intelligence, research and development, and the digital economy hold great promise due to their ability to stimulate innovation and improve the performance of the nation’s economy.
The UAE Ministry of Economy (MOEC) has reported steady growth in the flow of investments in these industries.
With the country seeking to attract further investments in these spaces over the coming years, the need for middle to senior management will be required to nurture prosperity.
Subsequently, a need for high-quality, sustainable mid-market-focused real estate products will be needed to cater to them.
Madhav Dhar, ZāZEN Properties’ COO and founding member, said: “Dubai is attracting high-net-worth individuals (HNWIs) at an unprecedented rate, but the fact of the matter is that not everyone can afford the glamorous lifestyle the emirate is synonymous with.
“The importance of middle-income real estate buyers, therefore, cannot be overstated. The launch of high-quality mid-market developments will provide investors and end-users with great value for money while helping to balance the inventory mix. as Dubai’s red-hot momentum eventually begins to slow down.”
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