Dubai: Why Villa Prices Doubled in 4 Years
Villa prices in ten Dubai neighborhoods have increased by over 100% in the last four years due to the increased demand from residents and wealthy individuals moving to Dubai.
Based on ValuStrat's recent report, villa capital values in Arabian Ranches, Dubai Hills Estate, Emirates Hills, Green Community West, Jumeirah Islands, Jumeirah Park, Palm Jumeirah, The Lakes, The Meadows, and Victory Heights have increased by over 100% from 2020-21 to July 2024.
The largest increase occurred in Jumeirah Islands with villa costs soaring by 180 percent over the last four years, followed by Palm Jumeirah (155 percent), Arabian Ranches (144 percent), Dubai Hills Estate (136.5 percent), and Emirates Hills (140 percent).
The property market in Dubai shifted during the pandemic as demand increased for villas, townhouses, and larger apartments, with residents moving into bigger units because of restrictions on public movement imposed by the authorities to manage the pandemic. The effective management of the pandemic also drew wealthy individuals from different areas of the globe who purchased real estate in Dubai and established it as their second residence.
The Dubai market was approaching its lowest point, with prices per square foot reaching all-time lows. The market became very affordable as prices decreased due to the pandemic, coinciding with a surge in demand from owner-occupiers for larger living spaces. Buyers in the local market were looking for additional space for working from home, areas for educating their children, and outdoor gardens.
After the pandemic, the influx of millionaires in Dubai caused the prices of villas and townhouses to increase significantly due to high demand. Currently, Dubai is home to 72,500 millionaires, 212 centi-millionaires, and 15 billionaires.
As per the 2024 Wealth Migration Report by Henley and Partners, over 6,700 millionaires are expected to move to the UAE this year, making it the leading destination for high-net-worth individuals.
In the future, the Global Wealth Report from Swiss bank UBS predicts a 15% increase in the number of millionaires with assets exceeding $1 million, rising from 202,201 in 2023 to 232,067 in 2028, an addition of almost 29,866 individuals.
Tuaima anticipates a strong demand for villas and townhouses, predicting that more communities will see their value double by the year's end.
As per the most recent report from Asteco, a total of 3,925 villas were finished in Dubai during the first half of the year, with 1,175 completed in the second quarter. 5,000 villas are expected to be completed and handed over by the conclusion of 2024.
He said that, based on the current market conditions, they expect villa values to rise by another 10 per cent in the second half of the year.
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