One plot, one villa norm impacts capital land prices

Demand for land in Abu Dhabi is shifting from large ones to small plots mainly due to a new norm that allows only one housing unit on each piece of land.

Quoting market sources, Al Ittihad reported that prices of small plots rose sharply after the decision.

The Abu Dhabi Municipality had however clarified that the decision applies only to new buildings and not those permitted till end of September.

The Department of Municipal Affairs would however look into special cases that may need to build more housing units on a plot.

Humanitarian cases that the department would consider for allowing multiple units are for a single family of a man with more than one wife, units for children with disabilities, for sons who are married but do not have separate plots to build their own houses, widows, and divorced women with children.

The newspaper quoted Abdullah Khalfan Al Naqbi, Chairman of the Board of Directors of Lindex Real Estate as saying the market is waiting to see the impact. He said land owners and customers are anxiously waiting to see the trajectory prices would take following the decision.

He said the rule carries a lot of advantages especially in regard to protection of infrastructure and privacy concerns of citizens as fewer dwelling units would be the order.

Expecting a decline in land prices, Al Naqi said 200’x200’ plots outside Abu Dhabi may be available for Dh4 million as against Dh5 million until recently.

Hamdan Khouri, Director of Seniors Real Estate said a 100’x100’ land in Madinat Khalifa ‘A’ and ‘B’ has risen during the week from Dh1.6 million to Dh1.8 million.

He confirmed that some owners of 200’x200’ plots in Madinat Mohammed Bin Zayed are ready to sell their land for Dh4 million, down from Dh5 million before the decision was announced.

He however pointed out that many customers would prefer the smaller 100’x100’ plots since they may not be allowed to build more than one unit on the larger 200’x200’ land.

Talal Khouri, Chairman of the Board of Directors of the Al Awael Real Estate felt the impact of the decision will be limited due to the slowdown in the market.

He said most owners of land distributed to citizens have already built their residences.

Land prices would however continue to decline in Abu Dhabi, not because of the decision, but due to the overall slowdown.

Mubarak Al Ameri, Chairman of Al Samood Real Estate however feels the decision will have a significant impact on the land market in Abu Dhabi.