Shortage of villas in Dubai pushes prices up

Shortage of villas in Dubai pushes prices up

Villas have always been at the top of the price pyramid of the Dubai real estate market. This is the most popular, the most exclusive and expensive product. So much so that even in a situation where the market as a whole is beginning to gradually stabilize, premium segment villas are still rising in price under the pressure of enormous international demand.

Developers have tried and are trying to keep up with demand, launch new projects, often designed for a specific audience of foreign buyers, but the Dubai market is large and requires no less attention. In addition, there are other problems that do not allow developers to get involved in the construction of expensive and exclusive villas for the richest.

In view of this, with the beginning of the explosive recovery of the UAE real estate market in 2021, after the acute phase of COVID-19, a huge number of buyers from all over the world flooded into the local market. For a year and a half, they bought up most of the available supply of villas, which resulted in an annual price increase in the premium segment by 70.3%, and began to compete for the few objects that remained, while developers are only trying to establish sufficient supplies of new goods to the market.

We will provide a perspective. In the three most popular areas of Dubai among wealthy villa buyers — Palm Jumeirah, Emirates Hills and Jumeirah Bay Island — only 8 new premium homes are expected to be delivered by 2025. In general, in the emirate, the main flow of new villas to the market will begin no earlier than the end of 2023.

Today, in the key areas of the city for villas, the price per square meter is around $800. And the greatest demand is concentrated in the price segment of $10 million. At the end of the second quarter of 2022, the cost of villas, on average, is 19.3% higher than a year earlier. However, this is the third quarter in a row, when the price growth for them is gradually decreasing, despite the fact that specifically premium villas continue to grow.

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