The Role of Affordable Housing in Middle Eastern Real Estate
The real estate market in the Middle East has been growing at an impressive rate over the past decade, supported by several dynamic factors. Investments by countries such as Saudi Arabia, the UAE, Oman, and Egypt have focused on creating post-oil economies that are less dependent on the region’s most famous and lucrative natural resource.
These investments have driven growth in infrastructure, tourism, and futuristic mega-cities. At the same time, attractive tax exemptions, residency visas, and foreign investment opportunities have complemented the ongoing focus on economic diversification, turning the region—particularly cities such as Dubai, Abu Dhabi, Riyadh, and Egypt’s New Administrative Capital—into some of the fastest-growing and most popular cities for both domestic and foreign relocation.
Urban Migration Drives Real Estate Market
There has been a marked increase in urban migration across the region. As more investment and work opportunities spring up in the largest metropolitan areas, residents of Saudi Arabia, Oman, the UAE, and Egypt are moving from small towns to large urban areas. This migration has put greater pressure on the real estate markets in the Middle East’s largest cities, leading to further interest from investors and developers. As rent and sales prices increase, it is only natural for investment capital to flow into these markets, leading to further growth.
One of the downsides of the boom in real estate markets throughout the Middle East, however, is a noticeable decrease in affordable housing. Increasing real estate prices and a constant influx of new urban migrants seeking work and opportunity have led to a major shortage in housing that the average worker can afford on their salary. Recognizing the potential problems that can arise from a housing crisis, many large, rapidly growing cities in the Middle East have taken steps to invest in new affordable housing projects.
Saudi Arabia and the Sakani Project
Saudi Arabia has been pursuing several goals under Saudi Vision 2030, which includes the creation of megacities and huge infrastructure developments. The government also aims to achieve a homeownership rate of 70% among Saudi families by 2030. One of the ways it is working to achieve this goal is via the Ministry of Housing’s Sakani Project.
The Sakani Project offers subsidized housing, rent-to-own programs, and financing programs such as low interest loans and installment programs that help make home ownership possible for young families, newly arrived residents, and people who have recently begun their careers. Launched in 2017, the Sakani Project has also worked with developers to increase the supply of new housing stock and has led to the provision of at least 1.2 million homes.
Dubai and Abu Dhabi’s Affordable Housing Push
The UAE is the poster child for real estate market strength in the Middle East, but with that success comes the inevitable struggle of lower-income families and middle-class expatriates to find affordable housing. To help mitigate this problem, Dubai’s 2040 Urban Master Plan prioritizes a balanced approach to real estate development, with several affordable housing developments featuring prominently in city planning.
Some of the most popular areas in the city for affordable housing developments include Jumeirah Village Circle, Dubai South, and International City. In May 2025, the Roads and Transport Authority, Dubai Municipality, and property developer Wasl Group announced a partnership that will set aside 1.46 million square meters for the development of affordable housing, with 17,080 affordable units planned. The development will also feature job centers, essential services, and recreation areas in line with Dubai’s “20-minute city” concept. At the same time, Abu Dhabi is also taking steps to integrate affordable housing into future planning and development.
These recent efforts by the UAE to encourage the construction of affordable housing further bolster the expat real estate boom, which has seen thousands of foreigners move to the UAE to take advantage of golden visa opportunities and the lack of income tax. While much of the focus has been on high-net-worth foreigners settling in Dubai and Abu Dhabi, more affordable housing makes this option available to a broader range of expats, adding fuel to the already booming real estate market in the country.
Egypt and the World Bank Continue Efforts to Provide Housing for Low-Income Families
Not all affordable housing initiatives in the Middle East are targeted at expatriates and people migrating to urban centers. In 2020, Egypt and the World Bank undertook a $500 million project to continue efforts to make housing affordable for the lowest-income families in the country. The investment was earmarked for affordable housing subsidies for private sector developers. The $500 million also complemented the already existing Housing Finance Program, which supported more than 280,000 households between 2015 and 2020. The vast majority of these households were in the bottom 40% of the country’s earned-income distribution. Programs such as these, in conjunction with the ongoing development and job creation in the New Administrative Capital, are changing the face of Egypt’s real estate market, job market, and overall population distribution on a yearly basis.