Dubai construction sector is growing, but city needs mid-market properties: analyst

ZāZEN Properties: Demand for mid-market real estate must meet population growth.

Dubai faces a pressing need for mid-market properties to entice diverse investors, as the emirate’s population is projected to double by 2040, warns ZāZEN Properties. Post-COP 28, the company emphasizes the urgency of bolstering sustainable construction efforts to meet the expanding population and fortify the economy. Despite nearly 50,000 new units delivered last year, only 24,000 are slated for 2024, highlighting a shortfall in addressing the mid-market housing demand amid rapid population growth.

Dubai real estate forecast

Even with over $356 billion allocated to private real estate projects and active public building initiatives, Dubai’s mid-market property shortfall persists. Notably, 2023 witnessed $17 billion in contract awards, surpassing the entire 2022 total. The UAE’s construction sector demonstrated a 3.3% growth in 2023, with projections indicating a further 4% expansion in the upcoming year. Despite substantial investments and positive trends, addressing the mid-market housing deficit remains a crucial challenge for sustaining the real estate sector’s equilibrium.

Madhav Dhar, COO and founding member of ZāZEN Properties, emphasizes the significance of construction statistics encompassing housing, transportation, and energy sectors in Dubai. With a current population surpassing 3.65 million and aiming for eight million by 2040, developers face the imperative to sustainably escalate housing construction. This aligns with the Dubai 2040 Urban Masterplan, targeting a population of 7.8 million in the next 16 years. The masterplan prioritizes objectives such as doubling green spaces, fostering vibrant communities with diverse housing and essential facilities, and optimizing economic land utilization. Despite progress, the mid-market segment demands heightened attention, as stakeholders seek affordable yet high-quality living spaces. Addressing this gap becomes pivotal to fulfilling Dubai’s comprehensive urban vision and accommodating the diverse needs of its residents, investors, and end-users while ensuring sustainable growth in the real estate sector.

Madhav Dhar, co-founder and COO of ZāZEN Properties

The Dubai real estate market, though currently witnessing mortgages constituting only 25% of property transactions, anticipates robust transactional activity in the first half of 2024. Forecasts predict a substantial 39.9% growth for the UAE alternative lending market in 2023, surging to $337 million from $240.9 million in 2022. This surge, alongside rising property prices, hints at an increased demand for mortgages, potentially surpassing the record-breaking 16,700 transactions in 2022.

Madhav Dhar of ZāZEN Properties underscores the pivotal role the mid-market segment will play in fortifying the UAE real estate landscape, aligning with the Dubai 2040 Urban Masterplan. As the market anticipates numerous off-plan developments nearing handover in the next year, prospective buyers can expect a broader range of choices. However, amidst rising prices, an upswing in mid-market residential projects becomes imperative to provide cost-friendly options without compromising the renowned quality associated with Dubai real estate.

Dhar highlights the critical need for mid-market residential developments, especially considering the population growth outpacing new property supply and approximately 100,000 freehold properties available in Dubai. With the city’s commitment to sustainability evident in events like COP28, ZāZEN Properties is actively contributing to key initiatives such as UAE Net Zero 2050 and the Dubai 2040 Urban Masterplan. Their upcoming development, ZāZEN Gardens in Al Furjan, is set to be the first LEED Gold-certified and Well-Being integrated residential project, scheduled for April 2024. The development aims to annually reduce 469 metric tonnes of carbon emissions and generate around 390,000 kWh of onsite solar electricity, aligning with the global sustainability agenda.

Against the backdrop of COP28, where over 80,000 participants engaged in crucial dialogues, ZāZEN Properties exemplifies its commitment to mid-market dynamics, sustainability, and aligning with key national and global initiatives, showcasing a comprehensive approach to real estate development in Dubai.

YOU MIGHT ALSO LIKE

VIEW ALL

Compare listings

Compare
jQuery(document).ready(function(){ if(typeof elementorFrontend !== 'undefined'){ elementorFrontend.init(); } }); jQuery(document).ready(function(){ if(typeof elementorFrontend !== 'undefined'){ elementorFrontend.init(); } });