Four key markets for GCC real estate investors recorded price declines in the prime residential sector in 2016, according to a report.
The cities that witnessed declines include Riyadh in Saudi Arabia, Doha in Qatar, Abu Dhabi in the UAE and London in the UK.
The latter, while not located in the GCC, has historically been among the most attractive location in the world for Gulf property buyers, with Qataris and Saudis together snapping up hundreds of millions of dollars of real estate in the upmarkets heartlands of Mayfair, Knightsbridge and Belgravia.
Prime residential prices in London declined by 4 percent year-on-year in 2016, Knight Frank’s latest Prime International Residential Index (PIRI 100) showed.
Prime residential prices in Abu Dhabi declined by 1.5 percent, in Doha by 0.5 percent and Riyadh by 0 percent, it showed.
The PIRI 100 – contained within Knight Frank’s latest annual Wealth Report published this week – tracks the value of luxury homes in 100 locations worldwide.
Knight Frank attributed lower oil prices and global economic slowdown to the fall in luxury property prices.
Dana Salbak, head of MENA (Middle East and North Africa) research at the consultancy, said: “Within the region, lower oil prices and global economic uncertainties impacted investor sentiment resulting in a slowdown in the overall level of transactions.
“Meanwhile, the strengthening of the US dollar impacted the purchasing power of investors from non-US dollar-pegged currencies.”
She added: “However, key to note is that this decline in prime prices has slowed down from 2015 levels.
“Dubai, for example, witnessed a 5.5 percent decline in prime property prices in 2015 versus -4 percent in 2016. Moreover, the prime market in the emirate continues to outperform the general mainstream residential market. This leaves us optimistic about the prospects for the sector.”
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