Dubai Meadows villa prices up 10-20 per cent due to supply shortage
Posted on 14 September 2011 with 7 comments from readers
Estate agents are reporting a 10-20 per cent rise in the selling prices of villas in the popular Dubai Meadows villa community originally developed by Emaar Properties in the early 2000s and one of the first projects to sell freehold villas to foreigners.
Meadows villas tumbled more than 50 per cent in price in the 2008-9 Dubai real estate crash with five-bedroom properties dropping to around $1 million in value. Today the same villas are selling for $1.1-1.2 million.
Shortage of stock
Owners receive almost daily calls from estate agents who appear to have obtained a list from Emaar Properties giving them the mobile phone numbers of the residents. It can be annoying but of course the owners do not especially mind being reminded that the prices of their homes are going up again.
It is simply a matter of supply and demand this year. The Arab Spring in particular has triggered an influx of relatively wealthy residents into Dubai from places like Bahrain no longer deemed safe for families by some expatriates and the villa communities of New Dubai are a popular choice.
Wealthy Arabs in the wider Middle East are also choosing the UAE as a safe haven in troubled times and are buying property in the country which now grants three-year residency visas to all home owners. The Meadows is near to the coastal strip of the Dubai Marina and a short ride to the Dubai downtown.
They are also planned communities with established facilities like schools, gyms, clinics and supermarkets, and multicultural, although the access road from the Sheikh Zayed highway is still a mess and construction is not complete after almost a decade. It should be finished within months, further boosting the value of The Meadows.
Apartment oversupply
The shortage of supply of villas contrasts with the huge number of apartments available in New Dubai with many more super-tall buildings due for completion very soon. Nakheel has promised to resume work on the Jumeirah Park villas near to Meadows 9 but the abandoned construction site suggests it will be at least a couple of years before these villas are completed.
In the meantime the other anomaly in Meadows pricing being addressed is the villas’ undervaluation in comparison to apartments. This is a nonsense because villas come with their own plot of land unlike apartments, and in addition benefit from far lower community service charges.
But to expect the adjustment in price levels for a popular villa community to herald a wider recovery in the Dubai real estate market is probably a bit premature. That Meadows villas will be the first to regain their 2008 peak price seems a far more obvious prediction.
7 Comments posted by readers:
Only a comedian or someone in a trance would predict that villas in Dubai will regain their 2008 peak price.
Ed Note: Recorded and to be replayed at a later date when this happens or do you think the UK will get there first?
Hear that Arabian Ranches Mirador also has a similar demand supply gap for independent 4 bed villas. Meadows is not alone… The centipede starts climbing back up the tree, the falcon is gone…
Prime locations in London are already back at peak and more. I think the rest of London will get there first, every day of the week and twice on weekends!
Prime locations here in Dubai are experiencing a “fools bounce”. My guess is that 3 years from now, you’ll pick them up at 30-40% less than current values.
I think we’re a long way off seeing 2008 prices in Dubai again, a 50% fall requires a 100% gain to get back to those levels! There’s definitely been an increase in prices for certain areas, but that’s probably normal for a market trying to find it’s feet again. It’s still a high risk investment for the average person.
Prime location London properties are pushed up by foreign buyers, it’s a playground for the rich only. A tiny percentage of the UK population might have the chance to dabble in that market, it’s a different world. The real market is still way overpriced for the average buyer and will see significant falls in the future. When? If only that damn crystal ball would work! Of course the UK economy could make a miraculous recovery with wage inflation significantly beating the increasing cost of living, i’m not holding my breath waiting for that to happen.
After 12 years of the most diabolical government the UK has ever had to suffer, I feel that the Property market may just perform better than many predict. London will host the best Olympic Games the world has seen next Summer with infrastructure and facilities second to none. Remember…London could hold a World Cup starting tomorrow without skipping a beat…not in 2022 after wasting billions of dollars on pointless infrastructure!
I agree with you Paul, the London property market is likely to benefit from the Olympics and prices in other areas might get a boost too. Great for investors who own, but still not sure if that’s a good thing for a market which is already overpriced for the majority, especially with the current economy in such a dire state.
Far more important issues to address than property prices, i.e. unemployment at 2.51m / 7.9%, RPI 5.2%, unsustainable debt levels, minimal economic growth, etc. We need to start producing and manufacturing useful things again, not just relying on a service based economy where we attempt to tell the rest of the world how best to use their assets and resources.
Qatar might as well spend those dollars, the US are doing a damn good job of making them worthless anyway! And, with their present resources and wealth, it’s not like they’re going to be burdening their citizens with debt for years to come.
Paolo, we have not seen wage inflation in line for ages here