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Despite Villa Prices Soaring 146% Since January 2020, Demand for Palm Properties Remains Strong
Dubai’s rental market may be stabilizing, but property sales values are soaring. Over the past 12 months, the average value of residential transactions has surged by 17%. In addition, the trend continued with a nearly 5% gain in the April-June period alone, as reported by Knight Frank.
For luxury home seekers, the prices in Dubai’s most exclusive neighborhoods have spiked by a staggering 125% since January 2020, making it a substantial investment. Cooling off seems unlikely, as Faisal Durrani, Head of Research for Middle East and Africa at Knight Frank, highlighted that the current trajectory of consistent price growth is persisting without any signs of slowing down. The demand-supply imbalance, particularly for villas, continues to drive this surge.
In areas like Jumeirah Bay Island, Emirates Hills, and Palm Jumeirah, villa prices have witnessed an impressive 11.6% increase in Q2-23 and an astonishing 125% rise since January 2020. Interestingly, only a mere 8 villas are currently under construction in these sought-after neighborhoods, adding to the scarcity factor.
Buyer attention is shifting towards other upscale Dubai locales. Including the highly sought-after Dubai Hills and Majid Al Futtaim’s ‘island’ developments at Tilal Al Ghaf. Emaar’s newly introduced ‘The Oasis’ community presents another potential opportunity. The fastest growth in villa values, at 24% over the past year, has been observed at Dubai Hills Estate, setting a new benchmark in the city.
Palm Jumeirah Sets Sail
The sustained desire for opulent secondary residences, especially from international purchasers, continues to drive the steady surge of transactions in Palm Jumeirah. This iconic location remains the pinnacle of Dubai’s villa market. Highlighting a remarkable 9% price growth in Q2-23 alone and an impressive 44% surge over the previous 12 months.
Villa prices in Palm Jumeirah have ascended by a remarkable 146% since January 2020, hovering around the Dh4800 per square foot mark. Comparatively, villa prices now stand at 67% higher than the peak recorded in 2017. While the apartment segment of Palm Jumeirah still trails its 2015 peak by a modest 7%.
Anticipation Grows for the Debut of Palm Jebel Ali
The real estate industry eagerly awaits the highly anticipated launch of Dubai’s second Palm island, Palm Jebel Ali. According to brokers, many high-net-worth investors are biding their time for this momentous event. Particularly those keen on securing prime locations as part of their investment strategy. The initial pricing of the Palm Jebel Ali’s launches is of particular interest, and comparisons with the rates on the Palm Jumeirah are eagerly awaited.
Sustained Housing Development Amidst Growing Demand
Dubai’s real estate landscape is set to witness the completion of approximately 42,500 units between 2024 and 2028. This projection translates to an annual average of just 8,500 homes, marking a substantial 75% decrease from the historical rate of home construction. Shehzad Jamal, Partner and Head of Strategy & Consultancy for the Middle East & Africa at Knight Frank emphasized that this scenario is poised to apply sustained upward pressure on property prices.
This is particularly evident due to the rapidly growing population, which has recently surpassed the significant milestone of 3.5 million residents. However, Jamal noted that this perspective is subject to change in the event of further project announcements. Around 40,000 New Residences Expected to Reach Completion in the Current Year.
