Prices of plots for the development of villas and residential buildings have increased by up to 60 per cent in Dubai due to the frenzy around new developments to meet the unprecedented demand in the post-pandemic period.
Some of the areas of Dubai such as Business Bay, Downtown, Marina and Palm Jumeirah have either no availability of new plots or they’re close to reaching their full capacity, with just a few plots left to develop new towers.
Real estate industry executives say that demand and prices of beach-front properties have seen higher increases, especially on the E-11 highways such as Marina and Palm Jumeirah as well as in Downtown and Business Bay areas.
Interestingly, many new developers from Europe, Asia and the Middle East have also forayed into Dubai’s property market to cash in on the higher returns, leading to higher demand for plots for property developments.
Moreover, some mega new communities have come up in the emirate such as the $20-billion The Oasis by Emaar and Dh30 billion Venice by Azizi Developments, resulting in higher demand for residential projects development.
“Residential villa plots, particularly in luxury segments like Jumeirah Bay, Palm Jumeirah, Pearl Jumeirah, and La Mer South Island, have experienced substantial price increases. The average price hikes in these areas range from 25 per cent to 30 per cent, with Jumeirah Bay witnessing even higher increases at 45 per cent to 50 per cent,” John Allen, CEO of valuation and advisory at Asteco, told Khaleej Times in an interview.
He said the surge in prices for non-beachfront plots in Pearl Jumeirah has risen significantly, whereas areas with limited vacant plots, such as Emirates Hills, are witnessing increased competition for available plots, as well as redevelopment and refurbishment projects.
“Secondary areas where plots are for self-build, such as The Villa, Jabel Ali Hills and Al Mamzar also recorded marked price increases, generally in the range of 15 per cent to 25 per cent over the year.”
Rizwan Sajan, chairman and founder of Danube Group, said plot prices in most of the areas have gone up by 20-30 per cent but few areas have gone up by 50-60 per cent.
Danube Properties launched projects worth over Dh10 billion last year including Oceanz in the Maritime City. “In Maritime City, plot prices have increased by 50 per cent,” he said.
He expects the plot price of its upcoming development Bayz in Business Bay will also witness a substantial increase. “There are no plots available in Downtown. In 6 months to 1 year, you will not get plots in Business Bay. There are very few left now. When you buy any plot in Downtown or sea-front, it has to go up very fast,” said Sajan.
He expects prices of the apartments in newly-launched Bayz, which is located a few away from the Dubai Mall and metro station, will jump 50-60 per cent, if not double upon completion.
Sajan added that projects built on plots facing the sea also give higher returns to investors who buy apartments in such projects. “Similarly, rentals are also going to be higher in such projects.”
John Allen of Asteco added that there is high demand for residential villa plots located in Jumeirah Bay and Palm Jumeirah. Likewise, there is strong demand for commercial development plots located within Business Bay and Dubai Water Canal. Generally, all commercial development plots with canal frontage have experienced a remarkable increase of around 60 per cent in a year.
Reaching full capacity
Asteco’s chief executive for valuation and advisory said Emirates Hills, together with many of the older, more established master plan communities, have largely reached full capacity in terms of availability of plots.
“As a general guide, plots are scarcest in communities located off the E11Rd Corridor, such as Dubai Marina, Downtown Burj Khalifa, Palm Jumeirah and Business Bay. The availability of masterplan scale development plots in secondary locations such as the E311 – E611Rd corridor has also become increasingly scarce. This has led to a number of developer mandates sitting unfulfilled.”
Allen added that there are still several residential communities which offer a range of choices, such as Jebel Ali Hills, Meydan, and Nad Al Shiba. In the commercial sector, there are various plots available within the more secondary located master developments such as Al Jadaf, International City Phase 2, Dubai Land Residence Complex, Liwan, Arjan, Majan, and Jumeirah Village Circle (JVC).