Many investors are demanding higher rates than earlier for their properties on sale in Dubai South and its vicinity, while many of them have decided to hold off the sales for the time being. Reason: The announcement of the relocation of the Dubai Airport (DXB) airport to Dubai South.
Industry executives said ever since the Dubai government announced the Al Maktoum International in Dubai South, many sellers have raised the price of their properties by up to 25 per cent.
“I was in talks with an investor to buy a three-bedroom property in Dubai South for Dh1.6 million. But after the announcement of the airport, he jacked up the price to Dh1.8 million and then to Dh2 million. Investors who had put their properties on sale in Dubai South and its vicinity are having second thoughts. They are holding their assets, expecting that there is going to be further appreciation,” said Naren Vish, who has been looking to buy a property in the area.
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Vish said the occupancy level in Dubai South is already quite high at over 70 per cent. “It is quite difficult to get 2-3 bed units on lower floors and this occupancy level is going to increase as airport development begins and more people will relocate to this area,” said Naren Vish.
Last week, the government announced that all operations at Dubai International (DXB) will be transferred to Dh128-billion Al Maktoum International (DWC) in Dubai South over the next few years. The new airport will scale up passenger capacity to 260 million annually and “fully absorb” DXB’s operations in 10 years.
With the emirate building an “entire city” around the airport in Dubai South, demand for housing for a million people will follow.
Angelika Egoschin, founder and managing partner, Real Estate Blondies, said the market dynamics have shifted notably since the airport announcement as sellers are “postponing” sales to capitalise on expected price increases, while buyers are looking for properties that promise long-term benefits from the upcoming development and infrastructure enhancements.
“There’s been a noticeable shift in the investment strategy in Dubai South since the announcement of the airport’s expansion. Many investors are now holding off on selling their properties. They expect that the new airport will enhance accessibility and infrastructure, leading to higher property values over time,” said Angelika Egoschin, founder and managing partner, Real Estate Blondies.
She added that property owners in key areas like Dubai South, Mohamed bin Zayed Road, and Emirates Road are beginning to ask for higher prices. “This is due to the anticipated increase in demand triggered by the airport relocation. While there isn’t a set percentage increase across the board, the trend towards higher property values is unmistakable.”
Farooq Syed, CEO of Springfield Properties, said there is “a discernible trend among investors opting to retain their properties around Dubai South”, expecting the airport to be a catalyst for unprecedented property value appreciation.
“This area is on its way to witnessing a remarkable transformation, prompting our clients to strategically delay their sales to leverage future gains. Property owners in key zones like Dubai South, along with those lining the strategic corridors of Mohamed bin Zayed Road and Emirates Road, are revising their pricing upwards. In the short term, an increase of approximately 10 per cent is expected, while a long-term increase of 20-30 per cent is anticipated,” he added.
Syed added that sellers are strategically positioning themselves “to benefit from the spike in demand that such infrastructural milestones typically generate. Particularly, there is a surge in interest for off-plan properties”.