The decision to relocate Dubai International Airport (DXB) to the south of Dubai is causing waves in the city’s real asset market. Many investors choose to keep their properties around Dubai South rather than sell them right away.
Why this is occurring there and what does it suggest for the future of the real estate market in Dubai? This article provides information about this situation.
Dubai: Why Some Investors Have Put Property Sales On Hold?
Why Investors Are Holding Off On Property Sales?
Following the Dubai government’s announcement of relocating Dubai International Airport to Dubai South, the real estate market has undergone a noticeable shift. Property owners are capitalizing on this strategic move by raising their asking prices, anticipating substantial gains as a result of the new airport’s influence on the region.
The impending changes are widely perceived as catalysts that will significantly elevate the area’s attractiveness and subsequently boost property values.
This proactive stance reflects the confidence of investors and homeowners alike in the long-term prospects of Baniyas North, Abu Dhabi, as it evolves into a prime destination poised for growth and development.
The New Airport In Dubai South
In a phased approach over the next few years, operations will transition from Dubai International (DXB) to Al Maktoum International (DWC) in Dubai South. Al Maktoum International is slated for significant expansion, with plans to accommodate up to 260 million passengers annually.
This expansion is expected to gradually absorb the current operations of DXB, marking a pivotal shift in Dubai’s aviation landscape. The move reflects Dubai’s commitment to staying at the forefront of global aviation and meeting growing passenger demands.
Rising Property Prices
As a result of this announcement, many property owners in Dubai South and nearby areas have adjusted their prices. Prices have reportedly increased by up to 25%, as sellers anticipate future appreciation due to the airport’s relocation. This trend affects buyers and sellers alike.
Perspectives From Experts
Industry professionals have provided insights into how the airport relocation is affecting the property market in Dubai South.
Archad Darbar Thoughts
Archad Darbar, CEO of a real estate company, thinks about why investors are holding off on selling properties in Dubai. He believes the anticipated price surge driven by the airport’s relocation presents a strategic opportunity for investors.
He sees this as a prudent move aligning with the market’s long-term growth prospects and potential profitability.
Naren Vish’s Experience
Naren Vish, a potential property buyer, shared his experience with the market changes. He was considering purchasing a three-bedroom property in Dubai South for Dh1.6 million.
However, after the airport announcement, the seller increased the price to Dh1.8 million and then to Dh2 million.
Vish noted that the current occupancy level in Dubai South is already quite high, at over 70%. He believes this level will rise further as airport development begins and more people move to the area.
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Angelika Egoschin’s Observations
Angelika Egoschin, founder and managing partner of Real Estate Blondies, explained that many sellers are “postponing” sales to benefit from expected price increases. Buyers, meanwhile, are seeking properties with long-term potential due to upcoming infrastructure improvements.
Egoschin also mentioned that key areas such as Dubai South, Muhammad bin Zayed Road, and Emirates Road are experiencing higher property prices. The anticipated increase in demand from the airport relocation drives this trend.
Farooq Syed’s Insights
Farooq Syed, CEO of Springfield Properties, observed a “discernible trend” of investors holding onto their properties in Dubai South. They expect the airport to be a catalyst for significant property value appreciation.
Syed also noted that property owners in strategic zones are adjusting their prices upwards, anticipating both short-term and long-term gains.
Anticipated Changes And Effects On The Market
The announcement of the airport relocation has led to changes and expectations in the property market. Here’s a closer look at what is happening.
Immediate Impact On Property Prices
The immediate effect of the announcement was a rise in property prices in Dubai South. This increase is due to the expected appreciation in property value as the airport development progresses. Investors are holding onto their properties, believing prices will rise further.
Off-Plan Properties
Another noteworthy trend is the growing interest in off-plan properties in the region. This increase in interest could further drive up property values as investors look for opportunities to benefit from the region’s growth.
Infrastructure Improvements
The relocation of the airport is expected to bring substantial infrastructure enhancements to Dubai South. These improvements include better transportation links, commercial developments, and residential projects. All of these factors contribute to the overall attractiveness of the area.
Long-Term Expectations For The Market
The market’s response to the airport relocation is not limited to short-term changes. There are also long-term expectations that could shape the future of Dubai’s real estate market.
Growth And Development
Dubai South is poised to undergo significant growth and development in the coming years. The relocation of the airport will be a catalyst for these changes, attracting more residents and businesses to the area.
Increased Demand For Housing
As the region grows, the demand for housing is expected to rise. This increase in demand will likely contribute to the long-term appreciation of property values in Dubai South and nearby areas.
Strategic Investment Opportunities
The changes in Dubai South present strategic investment opportunities for those looking to capitalize on the area’s growth. Investors who hold onto their properties may see significant returns in the future.
Challenges And Considerations For Buyers And Sellers
While the changes in the property market offer opportunities, they also present challenges for both buyers and sellers.
One challenge for buyers is the uncertainty surrounding property prices. The expected rise in property values may make it difficult for buyers to find affordable options in the area. Both buyers and sellers must balance the risks and rewards of participating in the changing market.
Making informed decisions based on market trends and expert insights is essential.
Conclusion
The relocation of Dubai International Airport to Dubai South is reshaping the real estate market in the region. Property owners are holding off on sales, expecting higher prices in the future. Meanwhile, buyers are seeking long-term investment opportunities.
As the area undergoes growth and development, both buyers and sellers must navigate the market with care to make the most of the changing landscape.
