The Dubai property market received a cautious vote of confidence when the developer Dubai Properties Group (DPG) announced it was restarting work on 348 villas and townhouses in its Mudon scheme in Dubailand. The developer said it would complete work on the first phase of its Mudon project, located 15 minutes' drive from central Dubai, within the next 18 months.
DPG, a subsidiary of Dubai Holding, said it was pressing ahead with the scheme of "affordable upmarket" villas in response to "recent reports indicating that demand for quality villas in prime locations remains strong in Dubai".
Improvement in villa market
In July, research from the property services firm Jones Lang LaSalle revealed an improvement in Dubai's villa market with sales in the year to May increasing by 21 per cent compared with a year earlier and 9 per cent higher than early 2008 levels.
"This is a clear confirmation of the market recovery and Dubai Properties Group's commitment to play an important role in the real estate development of Dubai," said Khalid Al Malik, the DPG chief executive.
"Our immediate priority is to delivering this first phase to retail investors." DPG added a third of units and infrastructure in the first phase area were already partially completed.
The company originally launched the scheme, which means "cities" in Arabic, at the top of the market in October 2007 amid plans for a total of 3,200 villas and 8,500 apartments within a 73 million square feet project.
Intended to house up to 50,000 people
The scheme was intended to house up to 50,000 people in five districts named after cities in the region – Baghdad, Beirut, Damascus, Cairo and Marrakesh. It was just one of a spate of master-planned neighborhood developments in the Dubai area that ground to a halt.
Craig Plumb, the head of research at Jones Lang LaSalle's Middle East and North African operation, said the announcement was a sign of confidence in the villa market, which currently makes up 20 per cent of the Dubai housing market and 22 per cent of the 41,000 dwellings now under construction.
"This is not a one-off," said Mr Plumb.
"We are starting to see other developers in Dubai also pressing ahead with similar schemes. Over the next few years we expect to see a change in Dubai's housing mix with more villas being built as demand continues and developers press ahead with schemes which leave them less exposed to market conditions."