(MENAFN- Khaleej Times) Published: Sat 17 Jun 2023, 8:03 AM Last updated: Sat 17 Jun 2023, 11:42 AM
Plot prices in Dubai, especially across prime areas, have doubled or even quadrupled in the past two years, and there is hardly any prime land plot available in areas such as Jumeirah Bay, say industry executives.
Due to the strong demand for real estate across the emirate in the post-pandemic period, plot sale rates have also skyrocketed on the back of high demand from local and foreign investors and developers, as well as end-users to wish to build their own homes.
Interestingly, sales of Dh100 million-plus plots have become a norm, too, in Dubai in the last year or so. According to figures released by Dubai Land Department released on Friday, 189 plots were sold for Dh2.28 billion during this week ended on June 16. The top three transactions were land in Palm Deira for Dh167.88 million, followed by land sold for Dh136 million in Business Bay, and land for Dh125 million in Al Thanyah First.
Supply extremely tight “There is hardly any prime land available in Dubai at the moment,” says Ahmed Abou El Naga, head of institutional sales of Metropolitan Group.
Ahmed Abou El Naga “With the current spike in the off-plan market, we are seeing several local developers wanting to launch new projects. They are actively looking to secure prime plots, and as a result, we are seeing an upward movement in prices. We are also seeing international developers entering the market. Since the beginning of 2023, these developers are partnering with brokers, contractors and consultants to venture into the Dubai market,” said El Naga.
In 2022, Metropolitan Premium Properties and Mallorca Properties closed Dubai's single biggest residential land transaction of Dh690 million deal for three sea-front plots at Dubai Marina.
Dr Taieser Al Saati, executive partner at Luxhabitat Sotheby's International Realty, revealed that supply is extremely tight in developed centrally located areas, driven by a huge influx of new residents and wealthy expats.
Dr Taieser Al Saati “As real estate prices have reached new highs, more and more people prefer to buy plots and build their own custom-made homes, rather than buying ready-made houses from developers as the cost of building a house may also be cheaper than buying it,” he said.
He added that there are three types of people buying plots – firstly who want to buy and sell it when the price rises; secondly, contractors who want to build projects there and sell it; and, thirdly, end-user who want to build a house.
Prices quadrupled Al Saati added Beachfront plots across Palm Jumeirah, La Mer, Pearl Jumeirah, and Jumeira Bay are in high demand.“Supply is reaching extremely low in these areas. You can hardly find a plot for sale in Jumeira Bay for example. In areas such as Al Barari, Al Wasl, and Umm Al Sheif; plot values have doubled between 2021-2023,” he said.
He added that prices have quadrupled on some plots on Jumeirah Bay and Palm Jumeirah.
Ahmed Abou El Naga of Metropolitan Group said the plot used to trade at Dh350 per sqft of gross floor area in Downtown during pre-pandemic and currently, it is about Dh700 sqft.
He pointed out plots all across Dubai, especially in sought-after locations, are at a premium, however, waterfront plots are the most in-demand, for example, in Palm Jumeirah, Dubai Water Canal, Business Bay, and mixed-use plots with a sea view in Jumeirah and Al Sufouh.
Additionally, prime locations near tourist attractions such as Dubai Mall, are in strong demand, too. For villas and townhouses, plots to develop a community are quite popular in Meydan and Dubai Land.
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