Prices of Signature and Garden Home villas on the Palm Jumeirah are on the rise, registering average increases of 11 to 25 per cent in first half of 2012 compared to same period last year.
Depending on their location and view, a few Signature villas are now listed at prices 50 per cent more than last year.
Although realty agents confirm that the majority of the purchases are in cash, a number of buyers using bank financing have gone up in the past few months suggesting banks have eased lending regulations and lowered their interest rates.
“Prices are driven, we feel, by regional turmoil bringing businesses into the emirate form other Arab countries,” Mark Towers, Managing Director, Edwards and Towers, told Emirates 24|7.
“Likewise, there is a lack of villas available, in general; whether it is beachfront or inland, and demand is outstripping supply.”
Towers revealed they had sold several villas in the last two months (May and June) on Palm Jumeirah with over 80 per cent of the deals done in cash.
“Our buyers are mixed, but recently we are seeing an increase of buyers from GCC and Russia.”
Villas by the millions
Data provided by Edwards and Towers, which specialises in sales of Palm properties, reveals that on average, Signature villa prices rose seven per cent to 50 per cent in H1 2012 compared to same period last year.
A Frond K and Frond E high number were now selling for Dh30 million and Dh28 million, respectively, compared to a Frond P and F high number for Dh18 million, respectively, and a Frond C high number for Dh15 million in H1, 2011.
A Frond A mid number villa was selling at Dh17 million compared to a Frond D mid number at Dh16 million in H1, 2011.
In Garden Home category, villas were selling from Dh10 million to Dh11.6 million in H1, 2012 compared to Dh7.7 million to Dh9.3 million in H1, 2011.
Stats provided by propertyfinder.ae reveal prices for seven-bed Signature villas on average rose by 10.79 per cent to Dh18.78 million in H1, 2012 compared to Dh16.95 million in H1, 2011.
Average price for six bed jumped 19.63 per cent to Dh21.02 million from Dh17.57 million, while five-bed villa went up by 17.45 per cent to Dh20.66 million from Dh17.59 million.
Average prices for six-bed Garden Homes villa increased to Dh19.35 million from Dh15.30, registering a 26.47 per cent increase in H1 2012 compared to same period 2011.
Average price for five-bed climbed 13.73 per cent to Dh11.01 million from Dh9.68 million, while average price for 4 bed soared 15.17 per cent to Dh9.94 million from Dh8.63 million.
Illy Dimitrova, a property broker with Elysian Real Estate, says prices on average on the Palm have gone up by over 19 per cent to Dh1410 per square feet compared to Dh1182 per square feet in May 2011.
The reason, she believes, for the price increase is mostly the return of the trust in Dubai’s market.
"Majority of the buyers are end users. A lot of investors are setting up their businesses in Dubai and Palm Jumeirah is the most luxurious and prestigious project in the emirate.
“These factors have increased demand and as the supply of villas has not increased prices have gone up."
Besides, Dimitrova informs the majority of transactions taking place on the Palm are predominantly in cash while only 20 per cent are mortgage buyers.
Gary Lintorn of BRIX Property Partners, says a lot of transactions are still in cash, but in the last three to four months there are more finance buyers coming in to the market as lenders are now lending again with attractive rates with a loan to value of 80 per cent.
“This is great for the market and we are definitely benefiting from the lenders coming back in to the market,” he adds.
According to Dubai Land Department records, 719 sale transactions worth Dh3.46 billion have been registered during the first half 2012.
In April, Nakheel Chairman Ali Rashid Lootah said that property prices on Palm Jumeirah were higher than the pre-crisis level with properties selling for Dh15,600 to Dh16,150 per square metre.
He added they had managed to sell plots on Frond N at prices 30 per cent higher than last year and 70 per cent of the frond had been sold.