Developers are increasingly offering smaller unit types.

Developers in Dubai are adopting a new strategy to capture an untapped market share. According to Khaleejtimes. They are increasingly offering dubai small properties -studios and one-bedrooms – and smaller sizes of each unit type to overcome the relatively high cost of land and deliver more affordable properties. This makes the units affordable to a segment of the population like small and young families who were earlier priced out of the Dubai housing market.

By reducing the size to fit market demand, the number of units in any project goes up, which means more kitchens, more bathrooms, more walls, more car parks, which increases the costs for developers,” says Ranjeet Chavan, managing partner, Gulf Sotheby’s International Realty.

End-users are also attracted to these units as they represent an opportunity for some to get onto the property ladder while living in a top location.

“From an investment point of view, they are a fantastic option – dubai small properties, the prices are lower, so it’s more attractive and they still offer very good rental yields. There are obviously larger units in the market and some buyers will prefer that, but those units: a) aren’t for everyone, and b) aren’t affordable to everyone,” explains Lewis Allsopp, CEO, Allsopp & Allsopp.

Most private sector developers and even the larger ones are deploying this strategy. When a buyer walks into a property, he likes to see a lot of space and good views.

Industry stakeholders claim these will not be cookie-cutter apartments. To improve space utilisation, some developers are adding modular space-saving furniture that changes functions.

Most developers aim to provide affordable communities with all the facilities and amenities needed by residents.”

Allsopp insists these are still very good apartments. They will be well-built, of good quality and in good locations,” he reiterates.

However, developers find it hard to retain the affordability of units after investors have picked it up at launch. “If small units remain affordable, then that is a good thing. When investors come pick the cheaper smaller units for rental income, that pushes prices up, hurting the little guy.

Market observers cite how smaller affordable properties are the norm in other global cities as well.

“The more congested a city, the smaller the units and higher the price. Dubai still has a lot of land available to develop. Scoring big profits from a development should not and cannot be the only driver. Developers must take into account cost of living versus average wages, etc,” concludes Dounia.


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