Commentary

Colin Foreman

Editor

After two years of sustained positive growth, Dubai’s property market is moving out of the recovery phase and into expansion.

As that shift occurs, the nature of the schemes planned by developers is changing, giving the construction industry a broader range of projects to work on.

During the initial phase of the property recovery in late 2020 and early 2021, villas were driving the market. After experiencing lockdown measures during 2020, and with many people still working from home full time, buyers were looking for more space and moving from apartments to villas.

As people bought up existing properties, developers were quick to launch new villa developments. For the construction sector, it was these low-rise projects that dominated the early stages of the recovery, with developers such as Majid al-Futtaim awarding contracts for work on the Tilal al-Ghaf villa development and Nakheel selecting contractors to build villas at Tilal al-Furjan.

Villa projects continue to be developed at pace, but unlike the earlier recovery phase, developers are now showing high-rise ambitions again.

Dubai is no stranger to high-rise projects. During previous boom periods from 2003-08 and 2012-14, developers launched and delivered a wide range of high-rise projects – including the world's tallest tower, the Burj Khalifa.

With subdued property prices from 2014, there were only a few tower launches until the end of 2022, which marked a more prolonged lull than the previous downturn, which lasted from late 2008 to 2012, following the global financial crisis.

In recent months, there have been a series of high-rise tower launches by the likes of Binghatti and Al-Habtoor, along with other towers launched by Damac Properties, Dar Global and Sobha Real Estate.

With property sales remaining strong, the likelihood is that more high-rise projects are coming. That likelihood will increase further as new masterplanned areas designed for high-rise projects are revived. For example, Dubai International Financial Centre (DIFC) is preparing plans for DIFC 2.0. Meanwhile, Dubai Holding is expected to revisit its master plan for Downtown Jumeira in the middle of this year and is reviewing design proposals from architects for the Dubai Pearl site.

As construction starts for these projects and tower cranes appear on the skyline, it will quickly start to look like Dubai is a market for companies specialising in high-rise projects once again.