Luxury villas in Dubai shot up in value by 20 percent last year, in the latest indication that the local property market is recovering after being hit hard by the financial crisis.
The Middle East region saw the best overall improvement in prime property prices in a ranking by real estate firm Knight Frank.
The Dubai market led the way regionally, with an increase of 20 per cent in villa prices between December 2011 and December 2012. That was second only to Jakarta, where prime property prices rose by 38.1 percent over the same period, according to the Knight Frank Prime Global Cities Index.
The average price of luxury homes in 26 of the world’s key cities rose by 1.7 percent in the final quarter of 2012 and by 3.6 percent year-on-year, the study found.
An inflow of investment from high-net-worth individuals (HNWIs) was cited as one factor behind the growth in Dubai property prices.
“Cities such as Dubai, Miami, Nairobi and London are increasingly considered investment hubs for HNWIs in their wider regions. In the wake of the Arab Spring, Dubai has been seen as a relative safe haven,” Knight Frank said.
Property prices in Dubai had slumped by over 60 percent since their peak prior to the global financial crisis. Frenetic growth in the emirate’s property market, led by off-plan purchases and speculation, led to a property bubble that burst when the downturn struck.
But the UAE property market is showing signs of recovery, with Dubai announcing a number of new residential and tourism schemes over the last six months.