Dubai waterfront property rates have doubled; will prices drop as Palm Jebel begins to take shape?

Dubai's waterfront property prices have witnessed a substantial increase in the past couple of years, led by Palm Jebel Ali, Jumeirah Islands and Bluewater Islands, due to the strong interest high net-worth individuals from across the globe have shown in the emirate's prime residential property markets.

The price rise has been more prominent after the pandemic, offering a high return on investment as rates more than doubled across some prime localities. But will the newly-launched Palm Jebel Ali, which will be twice the size of Palm Jumeirah and add 110km to the emirate's waterfront, help bring down waterfront property prices in Dubai?

Industry executives say it will take quite some time before waterfront property prices – which have seen notable increases after the pandemic – begin to stabilise or come down.

According to Property Monitor data, villa price at Palm Jumeirah, considered a benchmark for waterfront properties, has increased 132 per cent from Dh1,803 per square foot (sqft) in 2020 to Dh4,196 in 2023, a meteoric jump in prices and one that has seen many people cash in on their property assets over the last few years. Similarly, apartment prices on the Palm have grown by 119 per cent since 2020.

"When considering the Palm Jumeirah as a blueprint for the Palm Jebel Ali, the type of product they choose to release will play a crucial role. Assuming that villas, given their significant price growth in Palm Jumeirah, will be a core product for Palm Jebel Ali, competitive pricing will likely be necessary to attract both end-users and investors to this new district," says Matthew Gregory, branch director, Prime by Betterhomes.

However, he doesn't foresee this having a substantial impact on Palm Jumeirah itself.

"The established location, ready units, and iconic surroundings such as the Atlantis, Royal Atlantis, Burj Al Arab, and Marina skylines make it unique. Realistically, it may take several years, possibly even until the end of the decade, for people to start moving into Palm Jebel Ali. Therefore, I don't anticipate it having an immediate impact on waterfront properties elsewhere," said Gregory.

Laura Adams, residential sales director, Provident Real Estate, said the re-launch of the Palm Jebel Ali has occurred at a very favourable time, and there has been significant interest in the project.

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