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GCC market needs affordable homes for middle income group
- June 28, 2008, 11:43 am
The number of luxury residential towers and high-end projects is growing rapidly in the GCC property market to meet the needs of affluent buyers, while only a few developers are developing residential and commercial projects that cater to the growing needs of limited and middle income groups.
Middle income residential projects
The development of such affordable residential projects is extremely important as it will bridge the gap between supply and demand for low-cost apartments, and help restore balance to the market following the skyrocketing property prices, driven by soaring oil prices and high building material prices, which has increased rent and led to inflationary pressures.
Some governmental corporations are playing an active role in subsiding and developing projects for middle-income earners, but these initiatives are far from fulfilling expectations and are unable to meet the growing demand.
Mr. Saleh Sorayai, Chairman of SNASCO and Sharjah Investment Center, said:
‘Developing affordable residential units for limited and middle income groups is an increasingly urgent need in the real estate markets today.
Trends in the real estate sector are changeable and subject to supply and demand forces. Developers and financers should focus on low and middle cost projects to ensure steady return for their investments, as the prices will stabilize on a long-term basis.
When a balance between supply and demand is restored, then affordable property units will provide the steadiest return and will not lose value.’
‘It is important for middle income earners to be able to own their apartments, which should be of high quality and reasonably priced.
Most middle income earners in the GCC countries are allocating a large portion of their monthly income for residence, therefore, the need to provide the convenient apartments for these groups is urgent,’ he continued.
Sorayai added that real estate development market is witnessing an unprecedented boom, saying that the increasing demand for property units is driven by the steady flow of expatriates into the country as a result of economic growth, high oil revenues and rising investment volume in the GCC countries.
Therefore, these countries are in urgent need of affordable residential units to cater to the growing need of middle income earners
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