Dubai’s real estate market is experiencing an exceptional rise in land and plot prices, driven predominantly by the thriving Off-Plan sales sector. Key indicators underscore this upward trajectory:
- Sales Value: AED 179.3 billion, representing a 42% increase year-over-year (YoY).
- Sales Transactions: 63,700 transactions, a 44% YoY growth.
- Price per Square Foot: AED 1,600, marking a 15% YoY rise.
Developers, capitalizing on the growing demand, have propelled land prices — especially for buildings and towers — to new heights. But what does this mean for the future of Dubai’s real estate market?
The Off-Plan market, now accounting for about 55% of Dubai’s total sales transactions, has shown consistent growth over the past few years. This surge has led developers to seek new land opportunities, pushing prices higher. The trend is clear: land in certain areas remains relatively affordable until developers target these locations, causing prices to spike as demand intensifies.
This upward trend in land prices is expected to continue as long as developers can acquire land at costs that allow profitable development and sales of Off-Plan projects. The profitability of these projects is crucial for sustaining demand for land, ensuring ongoing growth in this sector.
When we look at the broader market, land availability buy property in Dubai today is far more restricted compared to five years ago. This shortage is particularly acute in high-demand areas like Business Bay. Whereas a few years ago, 100 plots were available for sale in this prime location, today, only 9 plots remain, with prices having doubled or even tripled since before COVID. The situation is even more challenging for larger plots suitable for master community developments, with private developers finding it increasingly difficult to secure enough land for such projects. This highlights the growing scarcity of land in Dubai.
The surge in land prices isn’t limited to plots for buildings and towers; villa and townhouse plots are also experiencing significant appreciation. Both individual buyers and companies are recognizing the lucrative potential in purchasing land, developing villas or townhouses, and selling them.
This trend has substantially driven up prices for villa plots in Dubai. For instance, in Jebel Ali Hills, land that sold for AED 70 to AED 80 per square foot before COVID is now fetching AED 250 to AED 300 per square foot — three to four times the previous prices.
With the Off-Plan market continuing its rapid growth, land prices are expected to rise even further. However, 2024 is anticipated to be a landmark year, with Dubai set to achieve a record number of newly launched projects. According to data from DXBinteract, this surge in new developments could further propel the market, making it a pivotal year for real estate investors.
In conclusion, while current market trends suggest a continued increase in land prices across Dubai, potential investors should proceed with caution, keeping a close eye on new developments as the Off-Plan market reaches unprecedented activity levels.
Explore the finest land and Off-Plan project deals with Inch & Brick Realty. Consult with our experts today and secure your future in Dubai’s booming market.