Dubai’s private developers have recently announced that erecting low-cost housing was not their first priority. High land rates in the emirate have prevented them from taking up low-range housing assignments. According to Ahmad Al Abdullah, chairman of New Dubai Properties that has constructed 22 projects worth over $7 billion across the emirate, high land rates are forcing developers into projects that involved building luxurious apartments, office blocks and Dubai hotels. These bring back far better returns on investment as compared to what the affordable housing may deliver. There is already a shortage of three and four star hotels in Dubai that many construction companies are trying to make business from. Nobody dares announcing low-cost housing projects on the other hand though.
According to various estimates 40% of the project amount is normally required for purchasing lands while the rest goes in undertaking construction plans. This means low-cost housing in Dubai may never be profitable in the present-day scenario. There are only four apartment blocks apart from twelve commercial towers and six Dubai hotels that New Dubai Properties has constructed so far....
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