Dubai Land Prices Outpace Property

Overseas investors should look at investing in Dubai land rather than property according to new figures released.

Land prices in freehold areas of Dubai increased by 13 per cent in the first six months of 2017 according to the latest data from Reidin-GCP.

In comparison, property prices in Dubai saw an annual price decline of 1.2 per cent in the second quarter of 2017 in figures recently published by ValuStrat.

This continues the trend seen over the last 14 years, where land investments in Dubai have out-performed residential units by more than 50 per cent, even after taking into account returns from rental income.

According to the report, Dubai land transactions have been steadily rising since 2016, but that has now transferred into price gains since the start of this year.

The report stated: ‘We expect land transactional activity to continue to gather momentum as the World Expo approaches [in 2020], consequently pushing prices higher.

The number of Dubai construction permits issued in 2016 rose by 38 per cent compared to the previous year, and with construction increasing the cost of land is only likely to go up.

The report also said that property values in freehold areas remain fairly stagnant, ranging from showing either low single digit growth or even a slight decline dependant on area.

There are four types of land ownership in the UAE – GCC land, available freehold for UAE nationals only; GCC land for lease, which is open to all nationalities and can range in duration from one year to 99 years; freehold land for all nationalities; and freezone land for lease, which is open to all nationalities and can range in duration from one to 99 years and is renewable.

Overseas investors can buy land in many areas of Dubai – generally the main foreign ownership districts. Foreigners wanting to buy land in Dubai and build their own home have done so in many popular areas such as Emirates Hills, Al Furjan and the Palm Jumeirah.

For those overseas investors with the funds and know-how to develop, or simply buy for investment, purchasing Dubai land may be the best way forward.