Dubai Witnesses a Surge of Up to 60% in Prices for Residential Plot Developments as Demand Skyrockets in the Post-Pandemic Era.
The demand for new developments in Dubai, particularly in areas like Business Bay, Downtown, Marina, and Palm Jumeirah, has led to a substantial increase of up to 60% in prices for plots designated for villa and residential building construction. Some key areas are experiencing a complete absence of available plots, while others are on the verge of reaching full capacity, with only a limited number of plots remaining for the construction of new towers.
The real estate sector is currently experiencing a surge in demand and prices, particularly for beach-front properties, with notable increases observed along the E-11 highways, including Marina and Palm Jumeirah, as well as in the Downtown and Business Bay areas in Dubai.
One interesting trend is the influx of new developers from Europe, Asia, and the Middle East entering Dubai’s property market to capitalize on the promising returns. This has further intensified the demand for plots designated for property developments.
Adding to the dynamic landscape, several mega communities have emerged in the emirate, such as Emaar’s $20-billion project, The Oasis, and Azizi Developments’ Dh30 billion Venice. These ambitious developments have significantly contributed to the escalating demand for residential projects, further shaping the real estate landscape in Dubai.
The residential villa plots in Dubai, especially those situated in prestigious segments like Jumeirah Bay, Palm Jumeirah, Pearl Jumeirah, and La Mer South Island, have undergone significant price escalations. According to John Allen, the CEO of Valuation and Advisory at Asteco, the average price surges in these exclusive areas range from 25% to 30%. Notably, Jumeirah Bay has experienced even more substantial increases, with prices soaring between 45% and 50%.
This surge in prices is indicative of the growing demand and attractiveness of luxury residential developments in these sought-after locations. The notable price hikes underscore the robust demand for high-end properties and reinforce the overall buoyancy in Dubai’s real estate market, particularly in the upscale villa segment.
The escalation in prices for non-beachfront plots in Pearl Jumeirah has been substantial, according to industry insiders. In contrast, regions with a scarcity of vacant plots, like Emirates Hills, are experiencing heightened competition for the available plots, along with a surge in redevelopment and refurbishment projects.
Additionally, secondary areas featuring plots designated for self-build purposes, including The Villa, Jabel Ali Hills, and Al Mamzar, have also observed noteworthy price increases. These increments generally fall within the range of 15% to 25% over the course of the year.
Rizwan Sajan, the Chairman and Founder of Danube Group revealed that plot prices across most areas have surged by 20-30%, with some witnessing an even more remarkable increase of 50-60%. Last year, Danube Properties successfully launched projects exceeding Dh10 billion, including Oceanz in the Maritime City.
Highlighting the substantial growth, Sajan noted a remarkable 50% increase in plot prices specifically within the Maritime City. Anticipating a similar trend, he expects the plot prices for the upcoming development, Bayz in Business Bay, to also witness a significant rise.
Expressing the evolving real estate landscape, Sajan pointed out the scarcity of available plots in Downtown, emphasizing that within the next 6 months to 1 year, obtaining plots in Business Bay would become increasingly challenging due to limited availability. He emphasized the rapid appreciation of plot values, particularly in Downtown and sea-front locations, making them highly sought after by potential investors.
Rizwan Sajan anticipates a substantial increase in apartment prices for the newly-launched Bayz, situated in close proximity to Dubai Mall and the metro station. He expects prices to surge by 50-60%, if not double, upon the completion of the project.
Sajan emphasized that projects developed on plots facing the sea tend to yield higher returns for investors who choose to buy apartments within such developments. Furthermore, he noted that rental rates for units in such projects are also expected to be higher, enhancing the overall investment potential for stakeholders.
According to John Allen from Asteco, there is a significant demand for residential villa plots situated in Jumeirah Bay and Palm Jumeirah. Additionally, there is robust demand for commercial development plots in sought-after locations like Business Bay and Dubai Water Canal. Across the board, commercial development plots with canal frontage have witnessed a remarkable surge of approximately 60% within a year.
Reaching Maximum Capacity
Asteco’s Chief Executive for Valuation and Advisory highlighted that Emirates Hills, along with many older and well-established master plan communities, has essentially reached full capacity in terms of plot availability.
“As a general reference, plots are in short supply in communities situated off the E11 Road Corridor, including Dubai Marina, Downtown Burj Khalifa, Palm Jumeirah, and Business Bay. The availability of masterplan-scale development plots in secondary locations, such as the E311 – E611 Road corridor, has also become increasingly scarce. Consequently, several developer mandates remain unfulfilled.”
Allen further mentioned that despite the scarcity in some areas, there are still several residential communities providing a diverse range of choices, including Jebel Ali Hills, Meydan, and Nad Al Shiba. In the commercial sector, numerous plots are available within master developments located in secondary areas such as Al Jadaf, International City Phase 2, Dubai Land Residence Complex, Liwan, Arjan, Majan, and Jumeirah Village Circle (JVC).