The relaunch of the Palm Jebel Ali megaproject could further boost Dubai’s property market, with estate agents reporting a 300% increase in the value of some waterfront properties.
Developer Nakheel said it is reviewing its plans for Palm Jebel Ali, a project that has been dormant since 2009, as the town sees a surge in demand for beachfront villas and apartments.
At one and a half times the size of the nearby Palm Jumeirah, the project is expected to take years to complete, but could fill the void in waterfront properties currently for sale or rent.
Nakheel confirmed that “the master plan for Palm Jebel Ali is under review. Further details will be released in due course.” There is no word yet on what infrastructure would be needed to meet the needs of the island, which is a 15-minute drive west of Dubai Marina.
Records show investors bought 29 properties on the man-made island before the global financial crash caused development to halt and property prices to plummet by 60%.
Dubai has been in the midst of an unprecedented property boom for more than a decade, with soaring rents and property prices.
Dubai’s land department said August was the best-performing sales month in 12 years, recording 9,720 total sales worth around $6.6 billion (Dh24.3 billion).
Although Nakheel’s plans for Palm Jebel Ali have yet to be released, they are likely to include a large number of new beachfront villas, with some reports claiming up to 1,700 could become available alongside 6,000 new ones. apartments.
READ MORE: Palm Jumeirah villa sells for $82.2 million, a record for Dubai property market
Dean Charter, the founder of Paragon Properties, said demand for beachfront homes far outstrips current inventory, which has led to a huge price spike.
“There is such a demand for beachfront properties in Dubai,” he said.
Two decades of Palm Jumeirah: in pictures
“People want a prime location, with waterfront properties rising in price dramatically.
“Over the past two years, house prices in Palm Jumeirah and Jumeirah Bay Island have increased by approximately 300%.
“Some places on the water have doubled in price, others have tripled.”
A five-bedroom, six-bathroom villa in Jumeirah Bay Island over 6,928 square feet with sea views is currently on the market for Dh38 million, while an upgraded five-bedroom beachfront villa in the Palm’s Kingdom of Sheba community is priced at Dh45 million.
“Property prices are likely to rise and rise”
Record demand for new build villas and luxury properties, in particular, has been fueled by shifting buyer demographics.
As more people seek to relocate to the UAE after its successful handling of the Covid-19 pandemic and golden visa program, vendors said community demographics are starting to change as more and more Europeans were settling in Dubai.
“Dubai has positioned itself as the place to be in a post-Covid world,” said Mark Castley, chief operating officer at Luxury Properties.
“We expect real estate rental prices and purchase prices to rise in the short to medium term, at least.”
Faisal Durrani, partner and head of research at property consultancy Knight Frank, said revisiting the Palm Jebel Ali could represent a significant step in the emirate’s evolution.
“The rebirth of the Palm Jebel Ali could lead to the emergence of Dubai’s seventh downtown, following Deira/Bur Dubai, Downtown, Dubai Creek Harbour, The Palm Jumeirah-Dubai Marina-JLT, Dubai South and the recently relaunched Dubai Islands . ,” he said.
Mr Durrani said that over the past 13 years, Dubai has matured – the city’s population has increased many times over and neighborhoods have multiplied and become fully developed and occupied.
“The onset of the pandemic triggered Dubai’s third freehold residential cycle, the return of Covid, which we have been in for two and a half years,” he said.
“This has translated into phenomenal demand for beachfront homes which has fueled record price increases – 50% for villas on The Palm Jumeirah over the last 12 months, for example.
“The resulting impact of this extraordinary demand has heightened attention to the lack of new beachfront or waterfront neighborhoods in the city.
“If and when the Palm Jebel Ali is revived, it could help fill the growing void of waterfront homes in the city.
“That said, with international demand from ultra-high net worth individuals primarily focused on second homes rather than investment properties, as was the case in previous cycles, the Palm Jebel Ali will need to focus on community infrastructure as a priority. and the creation of places, if it is to tempt international buyers of second homes in the same way as The Palm Jumeirah”.
A new master plan for the old Deira Islands project has also been developed by Nakheel.
Now called Dubai Islands, the waterfront area will include five islands over 17 square kilometers, in line with the requirements of the Dubai 2040 Urban Master Plan to create more green space and beachfront development.
Experts predict first properties by 2025-26
When completed, the islands will have more than 80 hotels and resorts and approximately 22 km of beaches and parks overlooking the Arabian Gulf.
Experts said there would likely be a lot of interest from potential buyers in both projects, but the impact on the wider housing market with tens of thousands of new homes available is unclear. light.
“The demand for beachfront properties is huge right now,” said Mark Richards, director of sales at Luxury Properties.
“We expect to see great interest, particularly from investors, as they want to put these properties on the rental market or on the short-term market, as it is a great source of income at the moment.
“It won’t be until at least 2025-26 before we can see the effect of the new stock in Palm Jebel Ali on the rest of the Dubai property market.”
Real Estate Apartment Prices in Dubai — September 2022
Updated: October 03, 2022, 08:14