A RECORD-BREAKING SALE
A 24,500-square-foot empty land parcel in Dubai sold for AED135 million ($34 million). This sets a new record for an empty parcel of land. The parcel is on the sought-after Jumeirah Bay Island. This is a seahorse-shaped piece of land accessible via a bridge from the Dubai mainland. The buyer, who remains anonymous, intends to construct a family holiday home on the land.
“It’s 125 million for sand,” says Andrew Cummings, head of prime residential at Knight Frank in Dubai. “Everything that has been making the press has predominantly been spectacular villas, it’s been incredible penthouses and all this stuff. But this is a massive record breaker for a land plot.”
The property was purchased two years ago for AED36.5 million. So, the seller earned an impressive AED88.5 million profit.
FOREIGN WEALTH AND THE REAL ESTATE MARKET
Fuelling Dubai’s thriving real estate market are many key factors. High oil prices, low tax, and crime rates, and the appeal of real estate as a wealth preservation strategy for the world’s wealthiest people are all key here. So, in times of uncertainty and conflict, Dubai is a haven for investors. Russians have been investing in Dubai's real estate market too. But also, new long-term resident "golden visas" are luring others with money to invest in Dubai real estate.
LIMITED SUPPLY AND HIGH DEMAND
Once hampered by overbuilding, the city now has what some brokers say is an under-supply of properties. This is especially the case on the high end. “Sellers are in quite a strong position at the moment to dictate where the prices are, because there are such limited options available for people to choose from, especially beachfront,” says Knight Frank’s Lyndsey Redstone, one of the brokers on the deal.
JUMEIRAH BAY ISLAND: AN EXCLUSIVE LOCATION
The parcel that sold last week is one of only 128 offered on Jumeirah Bay Island by government-backed developer Meraas Holding. This makes it exclusive compared with other developments in Dubai. All the parcels sold off years ago, and some were since flipped for impressive profits. The master development rules mean that dividing up the land is not permitted. But some buyers have combined plots to create space for mega-mansions.
The island is also home to the Bulgari Resort. This is one of the most expensive hotels in the city. This island will also host the Bulgari Lighthouse Tower, where apartment sale prices have been reaching highs before it is even built. The top penthouse sold for AED410 million in February.
THE FUTURE OF DUBAI'S REAL ESTATE MARKET
Real estate brokers predict that many more real estate records will break in Dubai. The seller in the Jumeirah Bay Island transaction also owns an identical plot next to the first, and he plans to offer it for AED135 million.
With limited options available for buyers, the demand for exclusive locations such as Jumeirah Bay Island is expected to remain high.
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