Bloom Properties has become the latest developer to announce plans to enter Dubai’s “affordable” housing market.
Bloom, which is owned by Abu Dhabi conglomerate National Holding, said that it planned to build a twin tower project of 686 flats in Jumeirah Village Circle in Dubai aimed at “mid market” buyers.
The developer said that prices for the studios, one, two and three bedroom apartments in the project would start at Dh360,000. The scheme is scheduled to be completed in early 2019.
“The shortage of good quality, mid-market accommodation is a major challenge facing the real estate industry across the country,” said Sameh Muhtadi, Bloom chief executive. “This project will allow us to meet the demand for mid-market housing and fulfil the requirements of the country’s growing middle income population without compromising the quality of construction and finishings.”
He estimated that the new project would offer rental yields of up to 11 per cent.
Bloom follows a number of other UAE developers who have recently announced housing projects aimed at the UAE’s mid market rather than its luxury segment where most of the homes being built are currently positioned.
Last month Aldar started construction work on its first mid market project, 400 apartments in Meera Shams on Reem Island. Sales on the project were launched last year with prices starting from Dh915,000.
In Dubai too, as the strong US dollar to which the UAE dirham is pegged makes Dubai property more expensive to many overseas investors, a handful of property developers are also attempting to exploit demand from the mass market of residents.
These include Nshama which has launched 2,000 supposedly mid market apartments with one bedroom flats starting from Dh614,000 and three bedroom townhouses at just below Dh1 million.
Building materials firm Danube is also attempting to position itself in this market launching a series of blocks in Al Furjan at prices starting at around Dh430,000 for a studio flat.
According to property broker JLL, only 22 per cent of new homes launched last year in Dubai could be classed as affordable to middle-income households.
JLL said that middle-income families in the UAE can afford to pay annual rents of up to Dh72,000 or mortgages on houses worth Dh790,000.
According to JLL’s definition, which includes the middle third of all earners nationally, there are more than 820,000 middle-income households in the UAE, representing almost 40 per cent of the population.