Wind Virtual World

* Land prices in Dubai are most reasonable in the world.

Despite the escalating cost of development land in Dubai, estimated to be 184 per cent over the 18 months to December 2005, property developers are not complaining. Are land prices cheaper than other major cities in the world," asked executive director of ETA Star Property Developers, Abid Junaid, when asked about the issue. "The answer is yes. For the infrastructure that is offered and the location, we feel that the land price here is cheaper than other cities in the world," he said. Doing a quick on-the-spot calculation, he said land prices in at least one city in India were more expensive than in Dubai. He estimated that in a built-up area of the city, the land price would average around Dhs250 per square foot.

Junaid said that Dubai had seen an increase in land values from 2002 for two reasons. First, infrastructure costs have gone up. That is the costs of roads, sewerage and waterways for example. Second, the land price is a function of the value put on it by the government. Only the three master developers, Emaar, Nakheel, and Dubai Holding are allocated land and they sell it on to the private developers. "And if you go to Sharjah, Ajman and Umm Al Quwain, then they are way below the other Gulf States.” He said that a plot of land in the industrial area of Dubai, costs about Dhs150 per square foot while outside Dubai it is selling for between Dhs25 and Dhs30 per square foot."

Even with the passing of the property law last month, it seems land prices are not forecast to increase. Managing partner, Landmark Properties, Rob Lovett said: "While I don't foresee prices rising significantly as a result, it will most certainly provide more support (i.e. an 'upgrade' in rating) to the market.” The value of land transactions in Dubai last week peaked at Dh730.66 million. The total appraisal of mortgages during the period was Dh 411.87 million, according to the Land Department, Dubai. A total of 41 sale transactions were registered with the department by the end of the week, the most significant of which was a plot in Al Goze Industrial Second that was sold for Dhs66 million.

Taken from Zawya.com