According to real estate officials, the expansion of launching projects designed to attract employees and dealers from low-income groups faces challenges, notably the high land prices, and the difficulty of obtaining bank facilities or financing agreements for such projects over long periods that suit them.
Speaking to Emirates Today on the sidelines of Cityscape Global, which began at the Dubai World Trade Center yesterday, they pointed out that although there is high market demand for these projects, their number is still very limited and disproportionate. With the volume of demand, pointing out that the expansion of these projects reflected positively on the markets, and stimulate the target groups to shift from leasing to ownership.
Real Estate Projects
Carlo Eid, director of marketing and communications at Thuraya Real Estate, said: “Real estate projects targeting employees and low-income people are important in the real estate sector because they address large segments of customers and witness real demand, but at the same time require certain specifications such as "These properties are already ready and built, so that they are attractive to dealers in those segments, who do not have the ability to pay rent for the units they live in, and to pay real estate installments to own at the same time."
He added that «employees and low-income customers are looking for opportunities to move immediately to units that allow them to switch from leasing to ownership, with the payment of soft payments close to the monthly installments for leasing, which is not only to obtain agreements for facilities and bank financing for these projects over long periods, which is what It is one of the difficulties that these projects are currently facing. ”
Land prices
Eid pointed out that «the high prices of land and the difficulty of obtaining land at affordable prices, in a location that will be attractive to dealers of these categories, is one of the most prominent challenges facing companies to expand the launch of projects of this kind in the market, although it will be projects that will have a positive resonance The sector, with attracting larger segments of dealers, is part of the shift from leasing to owning properties that fit their budget. ”
He said that «(the company) recently put forward a project targeting that segment, and presented details through its platform exhibition».
Luxury projects
Farhad Azizi, CEO of Azizi Real Estate Development Group, said: “The launch of real estate projects for low-income groups or employees is very limited in the market, compared to the launch of luxury projects, due to several factors, most notably that most real estate companies think in a manner The cost of construction in projects is comparable, whether for luxury projects or for low-income, with the application of strict specifications on the quality standards in construction, where the proportion in the cost differences between 5 and 10%, and therefore most companies tend to luxury projects, because their profits are higher compared Cost of construction.
He added that «these companies may only one or two projects of the luxury category, instead of going to several projects for low or middle income, and the process of collecting their investments in the long term with large repayment periods, while the big challenge in those types of projects is also difficult to obtain Interest rates and profits on real estate finance are still high and do not suit the categories of those types of projects that require special agreements with banks for long-term financing ».
He pointed out that «most of the land prices are high, especially in Dubai, and thus finding suitable sites and low prices for these types of projects is one of the challenges facing developers».
Azizi said that «working to remove these challenges, especially banking facilities will be useful and a catalyst for companies in the launch of large-scale projects of this quality, which in turn reflected positively on the real estate sector in attracting dealers from shifting from renting to ownership».
Shadi Bitdini, CEO of CENTURY 21 UAE, said: “There are limited real estate projects targeting the categories of employees, with most companies facing the challenges of high land prices, especially in Dubai. "In the long run, some companies do not want to collect property over many years." He added that «the expansion in the launch of these projects reflected positively on the revitalization of real estate markets during the coming periods».