Dubai: Abu Dhabi’s concerted push to create affordable housing stock could stoke sufficient demand in the longer term.
“The introduction of a way in which the emirate can tap into the potential of the expat-tenant generation could have huge ramifications for the city’s investment appeal,” said real estate firm Cluttons in a statement. “The establishment of a formal private rented asset class will set Abu Dhabi’s market apart from the rest of its regional peers.”
The Abu Dhabi Urban Planning Council is to enact legislation requiring 20 per cent of every new development to be set aside for ‘affordable homes’.
It remains to be seen whether these take the form of discounted rental properties or offered under some sort of rent-to-own scheme, according to Cluttons. “Or if they are simply sold at a discounted market rate to those who are eligible.”
“The eligibility criteria set for potential buyers will need to be carefully checked and enforced if the scheme is to be a success. No property re-sales for a period of five years may be a way to deter speculative activity and would also mirror moves being mooted by the UK’s Conservative government as a way to limit buying activity to genuine end-users.”
