Property prices in Dubai’s prime locations have been experiencing significant growth, with quarterly price increases ranging from single to double digits, driven by high demand from millionaires, high-net-worth individuals, and international investors.
As central districts such as Downtown, Business Bay, Palm Jumeirah, and Marina reach record high prices, many buyers are being priced out of these areas, prompting them to shift their focus to more affordable suburban locations.
According to data from Cushman & Wakefield Core, property prices in Dubai's central hotspots have continued to rise throughout the Covid-19 pandemic, with wealthy individuals relocating to the emirate and international investors seeking off-plan properties at more economical rates compared to cities like London, New York, and Hong Kong.
Prathyusha Gurrapu, head of research and consultancy at Cushman & Wakefield Core, reported that citywide sales prices have maintained an upward trajectory for the 17th consecutive quarter, reflecting a 20% year-on-year increase in Q3 2024. Villa prices soared by 23%, while apartment prices rose by 19% during the same period.
However, suburban and more affordable communities are now leading the market, as the rising costs in prime areas push more buyers toward alternative locations.
"The surge in suburban areas is largely driven by their lower price points and the significant price increases in central districts,"
said Gurrapu. Notably, Discovery Gardens recorded the highest price increase at 43%, followed by Jumeirah Lakes Towers at 34% and Dubailand (Remraam) at 28%. Other areas like City Walk and Dubai Hills Estate saw moderate growth at 12%.
This shift highlights a growing trend of value-driven investments in suburban regions, where buyers can still find more reasonable prices without compromising on quality. Gurrapu added that the demand for suburban properties continues to rise as more people seek alternatives to the steep prices of central Dubai.
Simultaneously, developers in Dubai are responding to this heightened demand by offering aggressive off-plan payment plans. Some developers are structuring payment plans as high as 80/20 or 75/25, making homeownership more challenging for lower-income buyers, particularly those looking for larger apartments or villas.
Asteco, a Dubai-based real estate services firm, noted that the continued demand for off-plan properties is pushing developers to implement these flexible payment structures to ensure timely delivery of projects, despite rising construction material costs and challenges in securing qualified contractors.
Off-plan transactions remain strong, especially in desirable locations with reputable developers. Many developments are selling out within hours due to competitive pricing, attractive payment plans, and the appeal of prime locations. This trend underscores the ongoing growth of Dubai's property market, even as buyers and investors seek more affordable options outside the city’s central districts.
As property prices in Dubai's iconic locations continue to climb, suburban areas are expected to see further demand, offering value-driven opportunities for buyers seeking alternatives to the premium-priced central districts.
News Source: Khaleej Times
