Property prices in Dubai are among those that have fallen fastest in the world over a period of one year, a new research reveals.
Between March 2014 and March 2015, prices in Dubai registered a 6.1 decline, higher than the price falls recorded in other major property markets like France, Singapore, Italy or Spain, according to the Knight Frank Global House Price Index, which tracks the performance of major residential markets across the world.
Out of the 56 markets monitored by Knight Frank, only 14 locations registered price declines. The worst performing is Ukraine, showing a 15.5 percent drop in rates, followed by Cyprus, where values fell by 8.2 percent and China, falling by 6.4 percent.
The index, which is compiled on a quarterly basis using official government statistics or central bank data, indicated that Hong Kong is currently the top performing market today in terms of growth in property values, registering an increase of 18.7 percent.
The second top performing market is Turkey, where values accelerated by 18.6 percent, followed by Ireland in the third place (16.8 percent), Luxembourg (12.1 percent) and Estonia (11 percent).
Knight Frank's findings about Dubai's real estate market are consistent with other market studies.
In a separate report released earlier, Phidar Advisory said that property sale prices in Dubai fell in the first six weeks of the second quarter this year, with apartment sale prices falling 1.5 percent. This is in line with Reidin's residential property sale price index for Dubai, which declined in April 2015.
Sources have confirmed there has been a slowdown in demand for properties in Dubai, particularly in the luxury sector, as foreign investors, which comprise a huge segment of the emirate's property market, have recently seen their purchasing power weakening due to low oil prices and strong dollar.
About 75 percent of property buyers in Dubai are hailing overseas, including Russia, Germany, United Kingdom and the Gulf. Christie's International Real Estate had warned that property markets that rely heavily on foreign investors are "susceptible to the economic ebbs and flows” of other countries.
John Stevens, managing director of Asteco, said that there has been a shift in market preference, with investors opting to put their capital on value-for-money housing, rather than on high-end luxury properties. "However, renewed focus on Dubai's potential and possibly pent-up demand for affordable housing is spurring local government, investor and developer activity," Stevens said earlier.
By Cleofe Maceda
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