Property prices are expected to experience a surge of up to 15% this year.
This year, property prices in Dubai South and nearby regions are expected to surge by up to 15 percent due to the anticipated relocation of Dubai International airport, which is likely to stimulate demand.
Industry leaders in real estate foresee a more rapid increase in prices upon the airport’s completion, projecting a demand surge for over 100,000 properties in Dubai South and its surrounding areas within the next decade.
Over the next decade, Dubai International (DXB) will gradually shift all operations to the new Dh128-billion Al Maktoum International. With an annual passenger capacity of 260 million, the airport will accommodate the transition seamlessly.
An “entire city” will be constructed around the airport in Dubai South, fueling the need for housing to accommodate one million residents.
Dubai South is already highly coveted by individuals seeking to purchase villas and townhouses, securing the second spot for demand in the first quarter of 2024 according to Betterhomes.
Thanks to Expo 2020 Dubai, numerous multinational corporations, such as Amazon, Noon, FirstCry, Landmark Group, Siemens, and others, have already commenced operations in Dubai South.
According to Svetlana Vasilieva, head of secondary sales at Metropolitan Homes, property prices are expected to gradually increase within a year, potentially by 10-15 percent, driven by anticipation of future growth initially.
Vasilieva further noted that a more substantial price hike is likely closer to the completion of the new passenger terminal at Al Maktoum International Airport, which will signify the full impact of the airport’s expansion and business activity.
Moreover, Vasilieva highlighted the Dubai government’s plan to develop a city around the new airport with a capacity to accommodate at least one million people, indicating significant demand for new housing in Dubai South.
She emphasized that the logistics and aviation sectors are anticipated to thrive with the new airport, generating job opportunities that will attract residents and solidify Dubai South’s position as a major business hub.
Additionally, the relocation to Al Maktoum International is expected to bolster the hospitality sector, leading to an increased demand for new hotels and serviced apartments for transit passengers and business travelers.
Faisal Durrani, partner and head of research for Mena at Knight Frank, emphasized the need for developers to accelerate construction plans to accommodate the projected influx of residents, with expectations for a million residents in the immediate vicinity of the Al Maktoum airport.
Durrani further highlighted the reactivation of the Palm Jebel Ali late last year as a signal of the growing prominence of southwestern Dubai as a focal point for economic activity. He underscored the importance of monitoring the supply story, particularly as Dubai is expected to deliver only 22,000 homes annually over the next five years, well below the 70,000 units needed each year to accommodate a population of 7.8 million by 2040.
Given the expected demand-supply imbalance, Durrani predicted sustained upward pressure on prices in the medium to long term, especially around Dubai South.
100,000s of units
Over the forthcoming decade, Paul Kelly, operations director at Allsopp & Allsopp Group, foresees a demand for hundreds of thousands of properties in Dubai South and its environs, factoring in the population growth.
“Any developer with land holdings in the region will be formulating strategies, and those without existing plans will be exploring land acquisition opportunities.”
“We anticipate a steady appreciation in property prices in Dubai South and neighboring areas over the next decade. Although there may be fluctuations along the way, overall trends will be upward due to ongoing developments, infrastructure enhancements, and entertainment offerings. Starting this week, we anticipate heightened market activity in these locales,” he elaborated.
According to Suchit Odhrani, client manager at Betterhomes, there is expected to be a significant surge in demand for new residences, buoyed by the area’s distance from heavy traffic and the enhanced road infrastructure, making it more appealing for families and individuals to consider property purchases in Dubai South.
“Furthermore, with approximately 2,000 units launched annually in Dubai South, we foresee this figure doubling as both investors and individuals currently commuting from distant locations for work are likely to express interest in relocating to the area,” he noted.
Proximity to Abu Dhabi
Suchit Odhrani noted that property prices in Dubai South have been on the rise since 2022, mainly attributed to the introduction of larger-sized properties compared to the average sizes found closer to Downtown Dubai.
Furthermore, Odhrani highlighted the advantageous location of Dubai South, which offers significant value to residents commuting between Dubai and Abu Dhabi, enabling them to reside in either city.
Cherif Sleiman, the chief revenue officer at Property Finder, emphasized the strategic positioning of Dubai South near major transportation links and world-class amenities, making it an appealing choice for both renters and buyers.
Sleiman also pointed out that the upcoming shift to the new airport in Dubai South will generate increased interest among property seekers and boost searches in nearby areas. He noted that historically, large-scale projects like this tend to stimulate community interest, and the ongoing development of Dubai South promises a new city center equipped with advanced planning and infrastructure.
