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Source: Bay Villas Brochure
Published on 10/21/2024

Dubai Faces Urgent Villa Shortage Amid Rising Demand from Expat Families

Limited Land for New Developments, Preference for Spacious Living Adds to Shortage

Dubai is experiencing a significant shortage of villas and townhouses estimated at around 10,000 units driven by an influx of high-net-worth individuals and long-term expatriates seeking spacious living arrangements.

Industry experts highlight that many new residents prefer larger homes that cater to families. Developers are increasingly focusing on high-rise apartments drawn by higher profit margins and lower costs associated with apartment construction compared to villa developments. As a result, villa prices have more than doubled in popular communities like Arabian Ranches, Dubai Hills, Jumeirah Park, Palm Jumeirah in recent years due to the growing demand.

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Recent data shows that villa sales accounted for 20% of transaction volume but represented 42% of the total market sales value. Areas such as Jumeirah Golf Estates and Arabian Ranches have seen heightened interest indicating a persistent imbalance between supply and demand.

The shortage is attributed to the high demand of family-friendly neighborhoods, limited land for new developments and the preference for spacious living post-pandemic. While villas generally yield lower returns compared to apartments, their long-term appreciation potential makes them attractive investments.

Developing villa communities involves significant upfront costs and complex logistics, deterring many developers. Consequently, the focus remains on high-rise projects resulting to the villa shortage in the market.