Distress sales push land prices down in Dubai

'Distress' sales are pushing land prices down in Dubai property market, says Pantheon owner. Most banks are only lending to big names, and that's hurting market prospects.

Kalpesh Kinariwala, Chairman of Pantheon Group, “We are seeing distress sales of land that were owned by investors who had plans to launch projects”.

“There is little appetite among most developers for new offplan launches in today’s market conditions. That’s why these investor-developers are selling their land holdings at much reduced prices… and that’s brought on value drops across the board, ” he added.

If land costs made up 20-25 per cent of a project’s overall costs at the market’s peak, the land component has slipped to as low as 9-10 per cent. In the last two years, this had been hovering in the 15-16 per cent range.

“Distress sales don’t just hurt property values – they do the same with land. In a way it’s good because this takes away all those non-serious players from the market”, said Kinariwala.