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Land is another asset where investors have been piling on in Dubai.
“On the residential side, we understand that in the last three months, prices have remained relatively stable or continued to drop in some areas, resulting in a slight increase in the number of transactions by investors,” said Andrew Love, Head of Investment and Commercial Agency, Cavendish Maxwell. “This likely signals that investors are seeing arbitrage pricing opportunities in the current market.”
According to Love, “In the current climate [where] we have seen a fall in end unit pricing, this will have a knock-on effect on the total income received by the developer and therefore what they can afford to pay for the land. Land values are typically very sensitive to changes in the market and have softened considerably in the last 12 months.
“It is inevitable that this will continue until the price of comparable completed projects in the same location stabilise or increase.”
Source: Manoj Nair, Associate Editor, gulfnews.com