By Andy Sambidge
Rents seen as low as AED25k for a studio as part of residential plan in Abu Dhabi.
Affordable homes with rents as low as AED25,000 a year will make up a fifth of new residential inventory in Abu Dhabi, a senior official has said.
The first homes priced under the new rules will be on the market “probably within the next year or two”, Michael White, a senior planning manager with the city’s Urban Planning Council (UPC), said in comments published by UAE daily The National on Wednesday.
More than 73,000 new homes are scheduled to be built in Abu Dhabi by 2013, meaning almost 15,000 apartments would be ring-fenced for middle-income earners, the paper said.
Rents will be set at about 35 percent of household income. The maximum income to qualify for the reduced rents will be AED252,000 a year, it added.
According to current wage levels, three-bedroom apartments could be as cheap as AED88,200, a third of the current price on the normal market.
All developments larger than 75,000 square metres, but not individual villas and townhouses will be required to include the afforable homes element under the new rules.
In May, it was reported that Abu Dhabi property developers were shifting their strategies to focus more on government backed residential housing projects in order to maintain market share, their building capabilities and cashflow.
Government funding for Abu Dhabi housing projects is vital for cash strapped developers until the recession hit property market rebounds, and they can capitalise on an expected supply shortfall in the number of homes being built.
In April Sorouh Real Estate, the emirate's second largest developer, signed a contract to develop two communities for Emirati families, in a deal financed by the emirate's Urban Planning Council. More government related projects are expected.
Colliers estimates a possible undersupply of 42,000 homes by in Abu Dhabi by 2013.For all the latest UAE news from the UAE and Gulf countries, follow us on Twitter and Linkedin, like us on Facebook and subscribe to our YouTube page, which is updated daily.