One of the questions I get from clients is about pricing. Often, it’s about if now is the right time to buy, or if there is a chance that prices are stabilizing soon.
I work primarily in Dubai Hills Estate, which is one of city’s most in-demand residential communities and highly sought by buyers seeking premium villas in an area that is fairly close to the city centre.
Since Dubai Hills first began handovers in 2019, it experienced a massive surge in both demand and pricing, with average price per square foot for villas currently at double the value they were in October 2020. Some believe we may be hitting a maximum and that prices are gradually stabilizing. It has led some of my clients to question whether they should hold off on purchasing until the inevitable drop happens.
I believe that anyone waiting for a slowdown in Dubai Hills Estate is being wildly optimistic – the community has continued potential for growth and has much more to offer buyers and investors alike.
Looking beyond the numbers
If we take a quick glance over the data, it seems to support the idea of price stabilization. The price per square foot for sales grew by around 3.5 per cent in the community compared to nearly 8 per cent price growth across the city. If we look at listing prices, the difference is less stark – 13 per cent versus around 11 per cent - but it seems clear that Dubai Hills is trailing the wider market in terms of pricing.
Why is such a highly sought-after community not seeing steeper price growth at a time when the market is recording phenomenal transaction numbers? To understand, we need to consider the timeline of Dubai Hills Estate and how it has grown.
A community with exponential growth
Launched as one of the flagship communities within Mohammed bin Rashid City, Dubai Hills Estate was highly anticipated because of the promise it offered – contemporary villas, bespoke mansions, a championship golf course, and so much more, in a tranquil suburban setting that would enjoy access to the city centre courtesy of new road networks.
Bit by bit, it has delivered on each of its promises, which has enhanced the value of its properties and pushed up prices. If you were to drive by the site of Dubai Hills in 2018, you would see a massive construction site that seemed to be out in the desert.
Only 5 years later, you find yourself driving past a beautiful green community with its own hospital, mall, park, golf course, and business park. As each component has come to fruition, it has added even more value, which has put property owners in the enviable position of being able to charge a premium for the privilege of living there.
Now that so much of the community has been developed, the growth in value has become more incremental. There is a lot more competition in the villa community space with projects like Tilal Al Ghaf and new sub-communities in Jumeirah Golf Estates.
So how does Dubai Hills Estate continue to build value for investors?
Renovation is name of the game
Owners of properties in many residential communities have shown increased interest in upgrading and renovating their homes. Especially in neighbourhoods that are older, or where the homes have a similar architectural style, interior and exterior upgrades add an element of uniqueness.
That’s where the value lies for buyers, which is why we are seeing more upgraded homes coming to market in areas like Emirates Living and Jumeirah Islands.
Dubai Hills Estate, despite being such a new community, is already jumping on that trend. Maple is especially popular for upgrades as the design of those properties allows for flexibility in the layout – the owner of a 3-bedroom Maple can convert it to a 4-bed with relative ease.
On the flip side, the removal of a bedroom can provide options for home office, gyms, and more.
So much more value to offer
Dubai Hills Estate is still a developing community that has much more to come in the near future. Newer sub-communities are still being developed and will be handed over imminently.
The first collection of residential plots, Emerald Hills, was readily snatched up by buyers, which should result in some incredible bespoke villas coming to market soon. A rising renovation market will push even the standard Sidra and Maple to an entirely different price bracket.
Dubai Hills Estate may have slowed down in the level of price growth, but the fact remains that they are still growing. And as it continues to offer value for buyers and investors, the pricing graph will start to steepen before you know it.