Until recently, the freehold real estate market in Dubai was dominated by luxury segments. Particularly between 2012 and 2014, Dubai's residential market witnessed a substantial rise in asset values and rents, which led to a considerable amount of mid to lower income residents migrating to other emirates; locations with slightly lower standards of living and less convenient commutes.
In the recent years, there has been a shift in focus towards more affordable housing, which has contributed to the significant upward trend in off-plan sales in 2017 as well as shaping the city's growth. The introduction of lower priced units into the Dubai market has led to the reverse migration of working class residents from other emirates to Dubai.
However, there is controversy over whether affordable housing compromises on quality due to its cost-conscious approach to design. Consequently, the use of lower cost and quality materials may lead to frequent maintenance checks; this is counterproductive for residents intending to reduce their housing costs. Defying these claims, developer Nshama continues to develop its mid-income community, Town Square, offering tenants great value for their money through optimal space usage.
Launched in 2015 by developer Nshama, Town Square is a 750-acre flagship project currently under construction. It is located at the intersection of Al Qudra Road and Emirates Road. The development is anchored by a central square, equivalent to 16 football fields in size. The central square also hosts the Vida Town Square Dubai Hotel. Composed of a combination of residential buildings and leisure amenities, Town Square has seven apartment buildings and four townhouse communities, surrounded by over 600 stores and restaurants, as well as two cinemas.
Nshama started the handover process of its Zahra townhouses ahead of schedule in Q3 2017. This was the first residential phase of the community to be completed, made up of 320 units of three and four-bedroom homes. According to the Property Monitor Index, Zahra villas/townhouses come in at the lower end of the market, with an average rent of Dh135,000 for a four bedroom, in comparison to Reem Mira, rented at Dh151,000.
The development is a more prominent option for families. The Property Monitor Index shows that Zahra townhouses make up 74.2 per cent of the total number of off-plan villa/townhouses transferred in Town Square in November 2017. Zahra Townhouses also have favourable payment plans, with nine installments evenly distributed throughout the development of the project. This high quantity of installment payments gives owners monetary flexibility by stretching the cost over a manageable period of time.
Launched shortly after and located in close proximity to Zahra townhouses, Zahra apartments feature 506 one, two and three-bedroom units in two low-rise buildings. Property Monitor's supply tracker shows the 506 units are scheduled to be complete by the end of 2018. According to the Property Monitor Index, the average sales price for a one-bedroom apartment is Dh775,900, a two-bedroom is Dh799,400 and for a three-bedroom is Dh1,527,100. Designed for single professionals and young families, Zahra apartments are deemed to be an ideal investment.
According to Property Monitor's Supply Tracker, there are 2,573 apartments expected to be handed over in Town Square during 2018. With a considerable amount of people migrating back to the emirate, this mid-income community presents a good opportunity for investment.
The writer is senior consultant at Cavendish Maxwell. Views expressed are her own and do not reflect the newspaper's policy.
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