Dubai’s success in winning the 2020 World Expo bid in November has had an immediate impact on property prices in some areas close to the proposed site, according to the latest report by listings website Dubizzle.
While most areas in Dubai experienced no change in the average advertised sale price of property between November and December, several of the communities closest to the proposed Expo site, near Jebel Ali, increased by up to 9 percent.
Jumeirah Village Circle, less than 20 minutes from the Expo site, saw the most significant increases, with the average advertised price of two-bedroom apartments soaring 9 percent to $1.47m immediately after the announcement on November 26.
One-bedroom apartments also rose by 3 percent, although three-bedders remained at the same price, according to the Dubizzle online advertisements.
Next door, Dubai Sports City experienced similar increases. Two-bedroom apartments rose 6 percent, while one-bedders increased by 5 percent and three-bedders went up 2 percent in December.
Advertised apartment sale prices also rose between 3-4 percent in Jumeriah Lakes Towers, which has been experiencing consistent price rises for some time.
Those increases are significant compared to no movement on advertised sale prices in most other areas.
However, Dubai Marina and Jumeirah Beach Residence, which also are close to the proposed Expo site but on the opposite side of Sheikh Zayed Road, failed to record similar price increases, with barely any movement across all categories.
Downtown Dubai was the only other area to record any significant growth in advertised sale prices in December, at 3 percent.
Villas remained stable in most areas.
A Dubizzle property marketing specialist Ann Boothello said it was difficult to determine exactly what influence the Expo announcement had on December property price increases.
She said some sellers would have held off advertising their property in December to assess the impact of the Expo win.
“Many sellers would be patient before they agree on new pricing for their units and would surely hold off on selling immediately post the announcement as they would wait to see how properties in their area are responding to the win based on viewings getting scheduled for their properties, observing trend reports for communities they have a property in over a month or two, and consulting with experts,” she said.
CBRE head of research Mat Green said property price rises across Dubai post-Expo win would remain slight for the time being because many already had increased in the lead up to the announcement based on speculation that Dubai would win and a general improvement in the economy.
“Dubai’s Expo success has certainly had a resoundingly positive effect on the performance of the local real estate market,” Green said.
“Both the rental and sales segments have experienced solid growth over the past 24 months and that was only heightened in the build-up to the announcement.
“During 2013, we saw a significant increase in residential rental activity with average rents increasing by over 25 percent. This followed a 16 percent increase during 2012.”
Green said he expected positive momentum to continue throughout 2014 amid sustained demand generated by the country’s robust economic performance.
“This is despite a notable development pipeline that will deliver well over 50,000 new residential units by the end of 2017,” he said.
“Ultimately, the future pace of growth and the level of escalation will depend not just on basic supply and demand fundamentals, but also on how the government choose to regulate the market moving forward, particularly how they deal with the key off-plan market, the principal source of speculative activity and the main driver of sales growth.”