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Dubai property market ...... land prices likely to soar in coming days.

Dubai sees steady increase in land prices

DUBAI, October 21, 2014

With an expanding significance of freehold in Dubai, UAE, land prices will continue to gather momentum, especially towards the build-up for the World Expo 2020, said a report.

As Dubai's real estate market enters its third cycle of 2014, the big question many investors and developers are asking is: Where to build?, pointed out real estate information company Reidin in its latest analysis conducted jointly with the Unitas group.

With tapering off of end-unit prices, the developers will rush to areas with higher Q-Ratios to experience higher appreciation of land prices, and trade away expected super normal profits, stated the report which analyses an integral part of the UAE's real estate transformation and cycles.

Through the Land Dynamics: Land versus End Units joint research, Reidin compares the land to end unit prices in both residential and commercial transactions, and analyses transactional activity in both segments, to where the most popular areas to build within Dubai.

First an analysis of Q-Ratios shows that the historical average is 1.3, which is 40 per cent higher than current levels and coupled with the year-on-year analysis of the transactional activity it shows a dip of 16-17 per cent in both segments.

According to Reidin, creating sensitivity between transactional activity and prices is higher for end-units compared to land, leading to a potential surge of land prices.

To date, Dubai World Centre (DWC) has the highest Q-Ratio, implying that land prices will continue to gather momentum, especially towards the build up for the World Expo 2020, it added
   
A supply analysis of commercial projects in Dubai shows that the bulk of supply expected to hit the market will be on Sheikh Zayed Road, said the report.

As Dubai's population begins to expand inward with new supply focused on the Mohammad bin Zayed corridor, an uptick for Department of Economic Development (DED) commercial demand will rise.

On the report, CEO Ahmet Kayhan said:"While our joint research with Unitas shows that the end-unit prices have surpassed their peak of 2008, land prices are still at 50 per cent of its peak levels. Even as end-unit prices stabilise, land prices are expected to rise and developers will accelerate construction and offer units along the Mohammad bin Zayed Road."

"Developments for offices and residential units along this corridor are expected to rise, giving birth to a more sustainable affordable housing segment in line with the vision of the Dubai Government," he added.-TradeArabia News Service




Tags: Dubai | land | freehold |

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