This is not a magnificent mansion. It’s not a designer flat or a high-end penthouse.
A piece of sand on an artificial island in Dubai was sold for 125 million dirhams ($34 million), setting a record in a market still gaining from the infusion of foreign money.
The sought-after Jumeirah Bay Island, a seahorse-shaped sliver of land connected to the Dubai mainland by a bridge, is home to the 24,500-square-foot vacant parcel. The brokerage on the deal, Knight Frank, marked that as a new high since it equates to more than Dh 5,000 per square foot. The buyer, who does not reside in the United Arab Emirates, intends to develop the land for a family vacation home. His identity was kept a secret.
“It’s 125 million for sand,” asserts Andrew Cummings, head of premium residential at Knight Frank in Dubai. “Spectacular mansions, magnificent penthouses, and other such items have been featured heavily in the news lately. However, this breaks a lot of land plot records.
The property was purchased two years ago for Dh 36.5 million, according to the Dubai Land Department, netting the seller a vast Dh 88.5 million profit.
High oil prices, the desire of the world’s rich to invest in real estate, and the belief that Dubai’s low-tax, low-crime environment makes the city a safe refuge during times of famine and conflict have all contributed to the city’s frothy real estate market.
While new, long-term resident “golden visas” are luring other wealthy individuals to invest in Dubai real estate, Russian people have been buying houses. Overbuilding once constrained the city, but some brokers now claim an undersupply of homes, particularly in the upper end.
According to Lyndsey Redstone of Knight Frank, one of the deal’s brokers, “Sellers are in quite a strong position to dictate where the prices are at the moment because there are so few options available for people to choose from, especially beachfront.”
The parcel sold last week was one of only 128 that government-backed developer Meara’s Holding initially made available on Jumeirah Bay Island, making it relatively exclusive compared to, for instance, the thousands of residences on the renowned Palm Jumeirah complex. All the parcels had been sold off at one time or another year before; some had since been sold again for a healthy profit. Although the land cannot be divided due to the master development regulations, some buyers have merged plots to make room for metabasins, according to Cummings.
On the island, only a few houses have been finished. Many more have yet to break ground, while some are still being built.
The Bulgari Resort, one of the priciest hotels in the city, and the upcoming Bulgari Lighthouse Tower, whose apartment selling prices have been rising even before it is constructed, are also located on the island. In February, the top penthouse, a nine-bedroom residence with five parking spaces, was sold for Dh410 million.
Brokers in real estate forecast that records will keep falling. For instance, the seller in the Jumeirah Bay Island deal also owns the identical site just next to the first one. He intends to sell it for Dh135,500,000.
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