The pace of increase in property prices in Dubai has slowed, but compared to 53 other global cities they are still increasing at the fastest pace in the world, according to Knight Frank.
Dubai continues to top the annual rankings for the fifth consecutive quarter, recording an annual price growth of 24 per cent though it has dipped from 27.7 per cent in the year to March 2014, the latest Global House Price Index reveals.
In the six-month period (Q4 2014 to Q2 2014) prices rose by 7.4 per cent, while in the three-month period (Q1 to Q2 2014) prices were up by 3.9 per cent.
The emirate’s mainstream market is outperforming the luxury end of the market due in part to the mortgage rules introduced by the UAE Central Bank which are less restrictive for those buying residential property worth below Dh5 million, the report adds.
“Dubai’s strong economic conditions and buoyant labour market continue to attract foreigners in their droves. Since this rising population needs decent (and not always luxurious) accommodation, we expect demand to outstrip supply in the short-term,” Khawar Khan, a Research Manager, Knight Frank Dubai, wrote on the company blog.
“All else equal then, we believe that mainstream residential prices will continue to rise faster than luxury home prices over the next 12-18 months,” he added.
The overall trajectory of the global house price index is upward with 40 of the 54 countries tracked by the index recording flat or rising prices on an annual basis. Two years ago, only 31 countries fell into this bracket The list of 53 countries compared by Knight Frank includes the United States, Hong Kong, India, China, the United Kingdom among others.
“Despite the fact that more countries are seeing positive price growth, the gap between the strongest and weakest performing housing markets has remained relatively constant in the last two years at 30-35 percentage points,” Kate Everett-Allen, International Residential Research, Knight Frank, wrote in the report.
Countries at the bottom of the list (54 countries) are no longer recording double-digit annual price falls, but those at the top are stretching further ahead.
“A few European countries have separated from the pack, and risen up the table in the last quarter suggesting a two speed Europe is emerging.
Turkey, Ireland and the UK are the frontrunners, whilst Cyprus, Greece and Slovenia are firmly lodged at the foot of the list,” Kate added.