The relaunch of the Palm Jebel Ali megaproject could further turbocharge Dubai’s housing market as real estate agents report a 300 per cent rise in the value of some waterside properties.
Developer Nakheel said it is revisiting its plans for Palm Jebel Ali, a project dormant since 2009, as the city experiences a surge in demand for beachfront villas and apartments.
At one and a half times the size of nearby Palm Jumeirah, the project is expected to take years to complete but could fill the gap in waterside properties currently for sale or rent.
Nakheel confirmed that "the Palm Jebel Ali masterplan is being revisited. Further details will be released in due course". There is no word yet on the infrastructure that would be needed to cater for the island, which is 15 minutes' drive west of Dubai Marina.
Records show investors snapped up 29 properties on the man-made island before the global financial crash caused development to halt and property prices to fall 60 per cent.
Dubai is in the midst of a housing boom not seen for more than a decade, with soaring rents and property prices.
Dubai Land Department said that August was the best performing sales month in 12 years, recording 9,720 total sales worth around $6.6 billion (Dh24.3bn).
While Nakheel’s plans for Palm Jebel Ali have not yet been released, it is likely to include a huge number of new beachside villas, with some reports claiming as many as 1,700 could become available alongside 6,000 new apartments.
READ MORE: Palm Jumeirah villa sells for $82.2m in record for Dubai property market
Dean Charter, the founder of Paragon Properties, said demand for beachfront homes far outweighs current stock, which has led to a huge spike in prices.
“There is such high demand for beachfront property now in Dubai,” he said.
_____________________________________
Two decades of Palm Jumeirah: in pictures
_____________________________________
“People want prime location, with water-facing properties which carry a huge increase in price.
“In the last two years, homes in Palm Jumeirah and Jumeirah Bay Island have increased by around 300 per cent in price.
“Some places on the water have doubled in price, others have tripled.”
A five-bedroom, six-bathroom villa in Jumeirah Bay Island across 6,928 square feet with sea views is currently on the market for Dh38 million, while an upgraded beachfront five-bedroom villa on the Palm’s Kingdom of Sheba community is priced at Dh45m.
'Property prices likely to rise and rise'
Record demand for new villas and luxury properties, in particular, has been fuelled by a changing demographic among buyers.
With more people looking to move to the UAE after its successful handling of the Covid-19 pandemic and golden visa programme, sellers said the demographics of communities is beginning to change as more Europeans make Dubai their home.
“Dubai has positioned itself as the place to be in a post-Covid world,” said Mark Castley, chief operating officer at LuxuryProperty.com.
“We expect property rent prices and purchase prices to increase for the short to medium term, at least.”
Faisal Durrani, partner and head of research at real estate consultancy Knight Frank, said revisiting the Palm Jebel Ali could represent a significant milestone in the evolution of the emirate.
“The Palm Jebel Ali’s rebirth could result in the emergence of Dubai’s much needed seventh city centre, following on from 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 expanded several times over and districts have mushroomed and become fully developed and occupied.
“The onset of the pandemic triggered Dubai’s third freehold residential cycle, the Covid-comeback, which we’re two and a half years into,” he said.
“This has translated into phenomenal demand for waterfront homes that has fuelled record price rises — 50 per cent for villas on The Palm Jumeirah in the last 12 months, for instance.
“The resultant impact of this extraordinary demand has sharpened the focus on the lack of new beachfront or waterfront districts in the city.
“If and when the Palm Jebel Ali relaunches, it could contribute to plugging the growing void of waterfront homes in the city.
“That said, with international ultra-high net worth individual demand predominantly focused on second homes as opposed to investment properties, as was the case in previous cycles, the Palm Jebel Ali will need to focus on community infrastructure and place-making as a priority if it is to tempt international second-home buyers in the same way as The Palm Jumeirah”.
A new master plan for the former Deira Islands project has also been drawn up by Nakheel.
Now called Dubai Islands, the waterfront area will comprise five islands across 17 square kilometres in line with the demands of the Dubai 2040 Urban Master Plan to create more green space and beachfront development.
Experts predict first properties by 2025-26
Once complete, the islands will have more than 80 hotels and resorts and about 22km of beaches and parks overlooking the Arabian Gulf.
Experts said there is likely to be plenty of interest from prospective buyers in both projects, but the impact on the wider housing market with tens of thousands of new homes becoming available is unclear.
“Demand for beachfront properties is huge at the moment,” said Mark Richards, sales director at LuxuryProperty.com.
“We expect to see big interest, especially from investors, as they want to put these properties on to the rental market or 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 could see the effect of the new stock at Palm Jebel Ali on the rest of the Dubai housing market.”
Dubai property apartment prices — September 2022
