SME Focus

The Rise of the Affordable Housing Sector

From introducing affordable homes to the road ahead: Rizwan Sajan and Danube Group takes on the housing market in the UAE.


Starting with a dream to make owning a home a reality for residents in Dubai, Danube Properties made waves in the affordability housing sector by launching its iconic housing projects across the city. Being part of the industry for the past 23 years, I, Rizwan Sajan have dipped my hands into every business related to the construction industry, and now as property developers, I venture deeper into the affordable housing sector, which was previously untapped but now has grabbed the attention of developers all across the UAE.

The idea to make homes readily available to customers stemmed from the feedback I received from my employees over the years. The soaring rents in Dubai have been a grave concern among many, and keeping in line with H.H Sheikh Mohammed Bin Rashid Al Maktoum’s plan to make affordable housing mandatory for all new residential developments; I saw my chance as a developer to make a difference.

In 2006, Dubai witnessed a great property boom with the market moving in an unrealistic manner. I was advised by many to invest in the real estate market at that time but decided to ‘hold my horses’ as I was sure the bubble would burst. But today, in a matured market where there are effective laws in place to monitor not only the developers but also buyers, I was sure it was the right time to dive in. While developers in the region primarily focused on catering to the luxury sector, we wanted to do something that was different. For this purpose, we launched our Glitz projects, which was one of the first affordable housing projects witnessed in the Dubai market. In addition to offering the lowest prices in the market, we also launched a value-based payment plan, allowing customers to pay a small fraction to us every month. I was able to provide this facility only because I belong from the building materials industry and believe to have the upper hand in price and quantity.

In the affordable housing segment, our vision is to deliver world-class properties at mid-segment price, and this is precisely where we create the difference. We have mastered the understanding of what our customers expect from the affordable housing market and are dedicated to making that available. Unfortunately, a number of developers mistake affordability for cheap and compromise on the quality of materials in their projects, which in turn leads to maintenance issues resulting in the decrease in property value. Our plan involves ensuring that affordability is made possible by using the area efficiently by selecting the right building materials and value engineering. Even though our properties are affordable, they are made with superior quality finishing and state-of-the-art amenities, making a high standard of living at an economical price a possibility for many people who desire it. We noticed that the main struggle for the midmarket is finding a piece of land in a decent location at the right price and controlling the rising cost of construction.

In the affordable housing segment, our vision is to deliver world-class properties at mid-segment price, and this is precisely where we create the difference.

Another factor that influenced our decision is the fact that the current supply in the market is not sufficient to meet the demand being generated and the steady drift from luxury and super luxury to the affordable segment. Like any other industry or sector, the affordable housing sector comes with its set of challenges. However, we can focus on three key areas – land, contractors & mortgage facility. Lands for construction in the secondary market are available at appreciated rates, and the ones available in the primary market are either not suitable for affordable housing or does not provide the incentive for such developments. There remains scarcity of good and experienced contractors leading to inflation of construction bid prices due to high demand; this further creates a shortage of skilled workforce which can impact the quality of construction. More liberalized home loan criteria & limits from the central bank can increase participation from banks offering attractive mortgage facilities to end users.

Looking at the road ahead, I firmly believe that the Expo 2020 will shape the economy in a big way. Soon after the announcement, we noticed a sharp increase in the property sector and the value of property would continue to appreciate till the Expo 2020 and beyond. Moreover, the rise in the number of projects has boosted the growth of ancillary businesses such as building materials as well as facilities management. Being an active participant in the building materials industry, we have witnessed a positive growth in demand for our materials, which are being used by contractors not only in the UAE but also across the MENA region. Moreover, the build-up to the Expo will see a growing demand for affordable housing to accommodate the massive influx of people coming to Dubai during the time.


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