An established leader in affordable housing development, Danube Properties has built nearly 5,000 residential units targeting tenants looking to move into home ownership. The company’s aggressive push into the niche segment continued with the recent launch of Lawnz, a Dh550-million gated apartment complex in International City.
In an interview with Property Weekly, Atif Rahman, director of the company, talks about the challenges and lessons learnt from this niche segment.
Tell us about your project offerings in the affordable housing segment? What do you mean when you say ‘affordable luxury’?
We have launched 4,744 residential units, including 171 town houses. Apart from the town houses, all our properties fall under the affordable luxury category. We have delivered 831 residential units, worth Dh1.12 billion so far, while two more projects with a development value of Dh570 million will be delivered this year. In terms of project delivery-to-launch ratio, we have one of the best records.
- Atif Rahman
By affordable luxury, we mean the project comes with all the facilities and amenities, including the final touch, of a luxury property, except the pricing and payment plan. Our industry-leading 1 per cent per month payment plan helps the end user to acquire properties without having to take out a loan. We have recently brought down the price of studio apartments from Dh300,000 to Dh290,000, again, a trend-setting price.
How do you define affordable housing?
Affordable is a very relative term. Something that is affordable to someone might not be affordable to others. However, there are certain norms followed in the global real estate industry. If the acquisition cost does not exceed 30-35 per cent of the household income, then that home could be affordable.
Here’s an example: for a Dh290,000 studio apartment, the buyer pays 25 per cent of the property value as down payment over a year and pays a monthly instalment of Dh2,900 for 75 months. By the time the project is ready, the buyer actually pays 50 per cent of the value and can move in. About 85 per cent of our customers in all our projects are end users who really are in need of affordable property and an easy payment plan. We want to convert the people who have long-term plans to buy an apartment instead of renting it.
Does this segment make good business sense when the land prices and other input costs remain high?
Yes it does. In fact, it makes a very good business sense. It makes real estate and housing more sustainable and helps families who were priced out to acquire homes easily. Our biggest volume of customer are from the mid-income segment.
Any lessons you might have learnt about developing affordable housing projects in Dubai that you want to share?
Affordable housing makes real estate business more humane as it helps people buy their dream home. It helps tenants consider buying a home, even with limited means. Our biggest moment of happiness is when we hand over the keys to the smiling, happy customers. When they see a unique price and payment plan, beautiful amenities and livable and easy-to-maintain communities, which are better than they originally signed up for, it makes them very happy and it gives us immense satisfaction.
Do you plan to launch any affordable project during Cityscape Global?
We are working on a couple of projects we will launch when we get the necessary approvals and also when we are fully prepared. Regardless, watch out for a number of announcements at Cityscape Global.
