More and more developers in the region are under pressure to build affordable homes in Dubai, UAE, to support the middle-income groups, said a report by property expert Reidin.

In the last year, a flurry of new projects has been launched to cater to this segment, which earns between Dh3,000 to Dh10,000 ($816 to $2,721), it stated.

As the markets have matured and slowed down, developers have catered to affordability, more often by reducing the size of the apartments, rather than the per square foot rates both in developed and developing communities.

There has also been an increasing incidence of bigger balcony spaces in some of these developments, according to the report.

An analysis across both the villa and apartment segments shows an up to 20 per cent reduction in sizes between existing supply and new project launches. This trend was witnessed within, as well as across communities; and is a trend that appears to be accelerating, said the expert.

According to Reidin, Dubai's price curve reveals an investor preference for smaller units, as investors inquire about units with higher yields.

Whereas in Manhattan, the upward sloping price curve per square foot reflects higher end user demand for larger living spaces. As the market matures, a similar trend is expected to be witnessed in Dubai as well.

"We opine that the reduction in living spaces partly explains the reason that end user demand has not been ignited in response to the recent flurry of 'affordable launches'", said the expert.

"In the event that markets remain sluggish, we opine that there is a considerable opportunity for developers to tap into this segment by offering lower per square foot rates with larger living spaces, thereby paving the way for the affordable housing segment to flourish," it added.-TradeArabia News Service