Prices are soaring on Dubai's The Palm Jumeirah due to high demand. Bloomberg
Prices are soaring on Dubai's The Palm Jumeirah due to high demand. Bloomberg
Prices are soaring on Dubai's The Palm Jumeirah due to high demand. Bloomberg
Prices are soaring on Dubai's The Palm Jumeirah due to high demand. Bloomberg

Dubai property deal worth $163m closed as Palm Jumeirah prices continue to spiral upwards


Ian Oxborrow
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  • Arabic

A property deal for the purchase of land worth Dh600 million ($163.4m) has been recorded by the Dubai Land Department as prices in prime areas of Dubai continue to rise.

The land, on The Palm Jumeirah, was bought by an unnamed buyer, with the area listed as 5,534 square metres.

The deal comes a few weeks after a record was set for Dubai's most expensive property with the sale of a villa on Palm Jumeirah for Dh302m.

The market has rebounded on the back of the UAE's broader economic recovery from the coronavirus-induced slowdown, and a shortage of prime property in the city that has been driving up prices.

Prime residential values in Dubai, which encompass The Palm Jumeirah, Emirates Hills and Jumeirah Bay, have risen by 89 per cent in the past 12 months, according to a report by property consultancy Knight Frank.

“Prime residential values in Dubai continue to strengthen, growing by 29 per cent in Q3 [third quarter] alone, fuelled by a persistent deluge of UHNWI [ultra high net worth individuals] who are zeroing in on Dubai’s premier districts, in search of second homes,” said Faisal Durrani, partner and head of Middle East research at Knight Frank.

“This trend marks a significant departure to the emirate’s two previous market cycles, where the overriding flavour of buyers was linked to buy-to-let or buy-to-flip purchases.

“This insatiable demand has fuelled villa price rises of over 100 per cent in locations such as The Palm Jumeirah since the start of the pandemic.”

A total of 152 ultra-prime sales, those costing more than $10m, were recorded in the first nine months of 2022, beating last year's total of 93.

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Palm Jumeirah villa sells for Dh280m — in pictures

  • This Dh280 million property has a prime location on Dubai's Palm Jumeirah. All photos courtesy Belleview Real Estate
    This Dh280 million property has a prime location on Dubai's Palm Jumeirah. All photos courtesy Belleview Real Estate
  • The custom-built villa has 10 bedrooms.
    The custom-built villa has 10 bedrooms.
  • The 33,000sq ft villa features state-of-the-art technology.
    The 33,000sq ft villa features state-of-the-art technology.
  • The villa has imported and handpicked book-matched Italian marble, and is furnished by uber-lux Italian furniture houses Giorgetti and Minotti.
    The villa has imported and handpicked book-matched Italian marble, and is furnished by uber-lux Italian furniture houses Giorgetti and Minotti.
  • Dubai’s property sector has been experiencing a boom, partly driven by Expo 2020 Dubai, which finished last month.
    Dubai’s property sector has been experiencing a boom, partly driven by Expo 2020 Dubai, which finished last month.
  • The indoor pool is perfect for when it's too hot outside.
    The indoor pool is perfect for when it's too hot outside.
  • The spa facilities include a hair salon and gym.
    The spa facilities include a hair salon and gym.
  • The previous record sale for a Palm Jumeirah villa was Dh185m, set in 2015.
    The previous record sale for a Palm Jumeirah villa was Dh185m, set in 2015.
  • An aerial view of the outdoor pool.
    An aerial view of the outdoor pool.
  • The property comes with more than 70 metres of private beachfront.
    The property comes with more than 70 metres of private beachfront.

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Knight Frank does not expect prices or demand to wane in the short to medium term, with a further price growth of 5 per cent to 7 per cent expected by the end of the year.

It noted that only eight new villas are due in Dubai’s prime residential areas between 2023 and 2025 — all of which are on Jumeirah Bay Island.

“The overriding challenge for the emirate is the shortage of waterfront homes,” Mr Durrani added. “The revival of Deira Islands as The Dubai Islands should help to alleviate the drought of ultra-prime homes once the development plans are finalised, albeit it is likely to be a few years yet before the first homes are ready to move into here.”

Broker Chris Boswell, who for seven years held the record for Dubai’s highest private residence sale and has sold more than 100 properties on The Palm since 2006, told The National that the man-made island was now one of the most premium waterfront addresses in the world, but remains still well priced compared to luxury locations in other countries.

“The demand we are seeing for Palm Jumeirah villas is completely unprecedented,” he said.

“I always said that real estate on the island was undervalued before the acceleration in prices and still feel prices are still under where they should be, in comparison to other global luxury waterfront destinations. The amenities, hotels, restaurants and retail destinations are the best in the world, and I foresee prices — due to the demand and the lack of prime supply — will climb further into Q1 2023.”

The market boom is expected to continue across all price segments, with a further boost set to come from the hosting of the football World Cup in Qatar next month.

Developer Nakheel said it was revisiting its plans for Palm Jebel Ali, which could fill the gap in waterside properties available. The project has been dormant since 2009.

Dubai Land Department data showed 22,895 units were sold in the third quarter, up 61 per cent from the same period in 2021.

Villa and townhouse prices in Al Furjan experienced a 12 per cent increase, according to Betterhomes, followed by a 7 per cent rise in Jumeirah Golf Estates.

However, Jumeirah Village Circle, a popular and affordable community for families, had a 5 per cent drop in prices.

“While there are still pockets of runaway prices. On the whole, prices have stabilised over the past quarter and we now seem to be in a period of strong transactions and sustainable price growth,” said Richard Waind, group managing director at Betterhomes.

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1. Domestic VAT refund amendments: request your refund within five years

If a business does not apply for the refund on time, they lose their credit.

2. E-invoicing in the UAE

Businesses should continue preparing for the implementation of e-invoicing in the UAE, with 2026 a preparation and transition period ahead of phased mandatory adoption. 

3. More tax audits

Tax authorities are increasingly using data already available across multiple filings to identify audit risks. 

4. More beneficial VAT and excise tax penalty regime

Tax disputes are expected to become more frequent and more structured, with clearer administrative objection and appeal processes. The UAE has adopted a new penalty regime for VAT and excise disputes, which now mirrors the penalty regime for corporate tax.

5. Greater emphasis on statutory audit

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6. Further transfer pricing enforcement

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7. Limited time periods for audits

Recent amendments also introduce a default five-year limitation period for tax audits and assessments, subject to specific statutory exceptions. While the standard audit and assessment period is five years, this may be extended to up to 15 years in cases involving fraud or tax evasion. 

8. Pillar 2 implementation 

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Contributed by Thomas Vanhee and Hend Rashwan, Aurifer

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Living in...

This article is part of a guide on where to live in the UAE. Our reporters will profile some of the country’s most desirable districts, provide an estimate of rental prices and introduce you to some of the residents who call each area home. 

Omar Yabroudi's factfile

Born: October 20, 1989, Sharjah

Education: Bachelor of Science and Football, Liverpool John Moores University

2010: Accrington Stanley FC, internship

2010-2012: Crystal Palace, performance analyst with U-18 academy

2012-2015: Barnet FC, first-team performance analyst/head of recruitment

2015-2017: Nottingham Forest, head of recruitment

2018-present: Crystal Palace, player recruitment manager

 

 

 

 

Quick pearls of wisdom

Focus on gratitude: And do so deeply, he says. “Think of one to three things a day that you’re grateful for. It needs to be specific, too, don’t just say ‘air.’ Really think about it. If you’re grateful for, say, what your parents have done for you, that will motivate you to do more for the world.”

Know how to fight: Shetty married his wife, Radhi, three years ago (he met her in a meditation class before he went off and became a monk). He says they’ve had to learn to respect each other’s “fighting styles” – he’s a talk it-out-immediately person, while she needs space to think. “When you’re having an argument, remember, it’s not you against each other. It’s both of you against the problem. When you win, they lose. If you’re on a team you have to win together.” 

Updated: October 20, 2022, 5:25 PM