Luxury vs. Affordable Housing: When's the right time to buy?

COVID-19 has jolted the emirate's real estate sector, with the majority of the impact trickling onto the residential sector, inducing a pent up demand, further activity and increased transactions among segments with this sector.

Lynnette Abad, Director of Research and Data at Property Finder, said about the impact on affordable housing and on the other spectrum, luxury housing: "When the crisis occurred last year, the UAE Central Bank eased the loan-to-value ratios to 20%, and this led to a decline in prices across the affordable and luxury communities. This was a time when saw movement in affordable housing as well as luxury apartments.

In fact, we had quite a few interesting off-planned transactions in the luxury sector that broke records.

She continued: "When it comes to the affordable sector, there are still a lot of opportunities, we have now seen an increase in price and demand and a lack of supply. The market dynamics have changed significantly in the last few months. This is a great time to buy - luxury or affordable, but that timeframe is going to be very short."

Interestingly, in September 2019, Property Finder said it had found a “significant shift” in development transactions from luxury to affordable units in Dubai, where investors were gravitating towards properties priced under $1.3m (AED5m).

Are we then now at a time when luxury has become affordable?

"It [luxury housing] was much more affordable during the thick of the pandemic. There was a surge in demand in the luxury market, but since then, the prices have witnessed an increase," Abad said.