Property prices across Dubai have been on the rise during the past couple of years as the UAE economy bounced back from the Covid-induced slowdown.
Some areas have seen sharper price increases, driven by strong demand due to factors such as location, amenities and quality of projects.
Dubai's Business Bay, which has recorded significant growth in prices, is now emerging as the new city centre, property consultant Knight Frank said.
"The significant growth in residential prices in Business Bay over the last two years is part of a broader re-pivoting of the city’s centre of gravity towards Central Dubai, encompassing the DIFC, the Sheikh Zayed Road area between the Trade Centre and Dusit Thani, as well as Downtown," said Faisal Durrani, partner and head of Middle East research at Knight Frank.
Prices in Business Bay have risen 16.7 per cent in the past two years, the consultancy said.
"Business Bay has found itself on the doorstep to Dubai’s main business district and in very close proximity to arguably the emirate’s most lifestyle retail rich neighbourhoods, such as Jumeirah and Al Safa," Mr Durrani said.
Almost 7,000 homes were delivered in the area in 2019 and 2020, and prices are, on average, 27 per cent cheaper than the Downtown area, he said.
"It’s no surprise that as premium waterfront plots have all but been sold or developed, Dubai Canal has filled a gap in the market by providing added opportunities," said Dean Foley, head of residential project sales and marketing at Knight Frank.
"Indeed, we are expecting the Marasi Drive area of Business Bay, specifically Canal-fronting plots, to be a new hotspot in Dubai."
But while other consultants agree that Business Bay has some exciting developments in the pipeline, they consider the city centre to be elsewhere.
Apartment prices in Business Bay rose 41 per cent year on year during the first quarter and 7 per cent from the fourth quarter of 2021 to the first quarter of 2022, data from Asteco showed.
Meanwhile, prices in Downtown Dubai rose 33 per cent annually, while Palm Jumeirah prices were up 50 per cent during the same period, Asteco said.
CBRE data showed Business Bay apartment prices rising 1.3 per cent in May after a 1.7 per cent increase in April. They were averaging Dh1,522 ($41.4) a square foot in May.
The square foot cost is below that of DIFC (Dh1,687), Palm Jumeirah (Dh1,996), Jumeirah (Dh1,996) and Downtown Dubai (Dh2,045).
One of the arguments against the Business Bay area being the city's new centre is that, when looking at major cities around the world, the financial centre or central business district is very rarely considered to be the true centre of the city, Mark Castley, chief operating officer at LuxuryProperty.com, told The National.
Dubai property prices: where they are rising and falling — May 2022
"Whether we are talking about Wall Street, Canary Wharf or Downtown Miami, these are areas where you will find high levels of activity but they aren't seen as city centres," Mr Castley said.
"The Business Bay area is not, I feel, a place that many would consider home.
"There are a number of high-end residential projects being developed in the area — The Residences Dorchester Collection and Mr C Residences, for example — but those are targeted towards a very niche audience."
A city centre really needs to tick a number of boxes, not just for wealthy people, but also for single professionals, families and investors, he said.
"In my view, an area like Jumeirah ticks all the right boxes," Mr Castley said.
"The area has a famous and always popular coastline, a wide selection of retail, dining and leisure, plus there is a mix of homes designed for Emiratis and GCC nationals as well as new freehold properties.
"But really, if we are looking at a place to consider as the centre of Dubai, the most obvious choice would be the area that is named after the emirate's ruler — Mohammed bin Rashid Al Maktoum City, with its flagship community of Dubai Hills Estate.
"There is a large selection of properties to choose from, whether you are looking for apartments, townhouses, villas or custom-built mega mansions. New projects are still being handed over and even newer ones being announced."
The area also has leisure and retail offerings such as Dubai Hills Central Park, Dubai Hills Golf Club and Dubai Hills Mall — all popular locations.
For Robert Villalobos, branch director at Betterhomes, the centre of Dubai has turned towards Palm Jumeirah.
The Palm is achieving the highest price for a square foot for off-plan developments, with AVA selling for Dh60.2 million at 7,431 a sq ft, and Atlantis the Royal fetching Dh62.9m at 8,843 a sq ft.
"It offers so much for everyone, from studios to luxury mansions," Mr Villalobos told The National.
"There's the new Atlantis the Royal project with a 90-metre sky infinity pool and celebrity restaurants which include Gordon Ramsey, Giorgio Locatelli, Nobu Matsuhisa, Ariana Bundy, Gaston Acrio, Heston Blumenthal and Costa Spiliadis.
"The new Marriott and Hilton hotels are ready to open, West Beach just opened with its array of social amenities and Five Hotels and Resorts offers annual music festivals.
"It’s also a stone's throw [away] from Media City, Healthcare City, as well as the office hubs of JLT and Barsha Heights."