26th March 2013

​

Jumeirah Park villas have been one of the best investments in Dubai for the years 2011 and 2012. It was mainly cash investors who picked up distress sales in 2011 and early 2012, as Nakheel announced their plans to finish Jumeirah Park and construction progress rapidly picked up speed.
​
'Capital appreciation', in real estate terms, is the rise in value of a property based on a rise in the market price. 'Capital gains' is the amount that exceeds the original cost price. A gain is only realized when it is sold to a new purchaser.

​

There has been plenty of talk about capital appreciation and gains in Jumeirah Park over the past few years, as this particular market has seen a significant increase in the price that people are prepared to pay for a Jumeirah Park villa. For example, in mid-to-late 2011, 4 Bed and 3 Bed Large villas were purchase for as low as AED 2.3m - 2.5m and AED 2m - 2.2m respectively. The current market price for a 4 Bed villa is around the AED 5m mark, while 3 Bed Large villas are currently transacting around AED 3.6m - 3.8m.

​

People should remember that not every Jumeirah Park villa was available at these low prices. There was only a small percentage available as many owners were prepared to sit and wait until handover, knowing that their asset had a good chance of increasing in value over time. Also, many owners bought Jumeirah Park villas at the launch in September 2006 through to 2008, where the original prices and resale values were relatively high. Therefore, the motivation to hold onto an asset rising in price has been strong for these owners, as they looked to first break-even on their initial investment and then secure a profit after holding the asset for several years.

​

When you compare prices of similar-sized villas in other Dubai communities, it appears that the brand new villas in Jumeirah Park could continue to rise in value for the foreseeable future. There are many different reasons for purchasing a real estate asset and we recommend that people clarify their own short and long-term investment plans before they finalise any real estate investments, using the help of an independent adviser if necessary.