Dubai realty overcomes slower growth rate while still topping global rankings
Dubai’s home prices were up only 3.4 per cent in the first quarter, but enough to continue to top the global rankings with the highest growth in residential property values for a fourth straight quarter, according to the consultancy Knight Frank.
In the 12 months to end March, the city recorded increases of 27.7 per cent, with the second-half of 2013 seeing the sharpest gains.
The slackening in the pace of growth during the first three months of this year offers fresh evidence that the doubling of registration fees to 4 per cent (from October) and the tightened mortgage caps (since December) have yielded the corrective results.
Among other global property markets, the US (in ninth spot) and Australia (placed seventh) saw value gains that pushed them into the Top 10 of highest price growth destinations, alongside the likes of Beijing and Shanghai (China combined was ranked second), Turkey and Brazil.
“Even if the rate of increase in property values has slowed down, Dubai still retains a lot of interest among Gulf-based investors, particularly those from Saudi Arabia,” said Abdullah Alajaji, CEO of the consultancy Driven Properties. “We are talking about rental yields in the 6 per cent range against the 2 or 3 per cent you get investing in London.”
In the US, “The pace of price growth slowed slightly in the first quarter,” says the Knight Frank report. “Prices rose on average by 10.3 per cent on an annualised basis, down from 11.3 per cent (in the) last quarter.”
As for property markets which did not measure up, the bottom rankings were populated by eastern and southern Europe cities. There were also places for Singapore and Japan ... clearly ‘Abenomics’ is not at work in Japan’s realty space.
Of the 14 countries that recorded a decline in house prices year-on-year, 12 of these were in Europe.
Going forward, “All eyes will remain on central banks, in particular the Federal Reserve, the Bank of England and the European Central Bank,” the report added. “The issue is not when interest rates rise but the speed and extent to which they do.”
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