Dubai to face shortage of Villas, Townhouses

Dubai will see a shortage of villas and townhouses in the next three years as most new property launches are focused on residential towers, according to real estate industry executives.

New properties are launched almost every three days, and 90 per cent are apartments. In three years from now on, Dubai will face a massive shortage of villas and townhouses and there will be strong demand for them.

Baes on the number of expats coming to Dubai and migrating their businesses here, it is obvious that there could be undersupply, but not oversupply.

The villas and townhouses market in the emirate suffered from 2015 to 2019, but demand has been exceptionally strong in the past two years, driven by the change in the lifestyle of residents after the outbreak of the pandemic, along with the migration of high net-worth individuals into the country.

In fact, demand and prices for villas and townhouses has been growing faster than the apartment segment in the past two years.

According to reports, prices in Dubai’s residential market increased on average by 8.9 per cent this year to September 2022, while average apartment prices rose by eight per cent, and average villa prices rose by 14.3 per cent.

It said Dubai’s average villa prices reached Dh1,350 per square foot in September 2022. This average rate has not yet reached the levels seen at the height of the last market cycle in late 2014. On average, villa prices are still 6.6 per cent below their peaks.

The latest figures released by a source showed that 2,930 villas were completed in the first three quarters, while another 1,000 are likely to hit the market in the last quarter of this year.

As a result of strong demand, Dubai’s real estate market broke all records with the most expensive villa being sold for over Dh302 million last month.

In addition, the Golden Visa has also boosted demand for villas among European, Russian, Middle Eastern and Asian investors.