By Andy Sambidge
New global report also sees emirate slip in list of 40 most influential cities.
Dubai house prices plummeted by 45 percent, making it the worst performing real estate market in the world, according to The Wealth Report 2010.
The new study, produced by Citi Private Bank and property consultancy Knight Frank, also showed that Dubai was the biggest faller in the list of the world's 40 most influential cities.
The emirate, which has been hit hard by the impact of the global economic crisis, fell three places to 31 in a list based on their economies, political power, knowledge and quality of life.
The list was headed by New York which took over London's top spot this year, as the UK capital also struggled with the financial downturn.
High-end home prices in three out of four global locations fell in 2009, but Dubai prices were by far the worst hit, with Dublin seeing the second highest declines (25 percent).
The Wealth Report 2010 said luxury home prices rose more than 40 percent in the Chinese cities of Shanghai, Beijing and Hong Kong.
Liam Bailey, head of residential research, Knight Frank, said: “This year, we expect positive annual growth in many more of the locations covered by the Prime International Residential Index (PIRI). We are already seeing prime property prices start recover in places like New York as confidence returns to the market.
"Those markets that could continue to struggle for a while longer are those like Dubai that were primarily driven by investors, and those like Dublin where the credit crunch still continues to bite.”
He added: “The Wealth Report 2010 reveals that the global market for prime residential property polarised during 2009. While some Asian cities saw phenomenal growth as China recovered strongly from the global recession, most locations around the world recorded price falls. The hardest hit were those such as Dubai and Dublin that really soared during the height of the property boom that preceded the credit crunch.
“I do believe, however, that we will see this gap narrow again in 2010. It seems unlikely that property prices in cities such as Shanghai can continue to grow at these kind of rates, and in many locations there was positive growth in the latter half of 2009."
Property consultancy Knight Frank's report is flawed. It compares the city of Dubai's property prices with those of countries such as the UK, the US, et al. If this comparison was on a city/state level (i.e. compared Dubai to sub-prime states such as Florida or California), and not on an average country basis, then Dubai figures would not look so bad.
the lack of Strata law and protection for investors against developers greed in Dubai will continue to have negative impact even for 2010. Many investors are sellinga and taking their moneys to other countries were there are legal frames. The low Â£ is also pushing UK investors to sell and take their benefits to UK, SA, Australia or HK. Dubai is not serious in dealing with the real issues and will regret it long term. A pity for this city that could be a real paradise without so many incomptence.
Perhaps if Rashid has read the article as it was posted he would have noted that the study was based on the 40 most influential cities in the world. It was not a comparison of countries or of city states. Comment on the article, not something that is not written.
There no such things as 'sub-prime states' There are sub-prime mortgages. In any case, there's no point protesting that Dubai doesn't look so bad -- eventually, it is what it is -- saying something different doesn't change the facts!!!!!
The article talks about a study done comparing 40 most influential cities in the world; and it quite appropriately compares cities, not coutries. Where in the world did you get the idea that they are comparing countries?? Also, their study only reveals what most of us already knew; they are talking facts. Some of us very well know the reasons behind these facts as well.
@Joe .. I'll call it whatever I want to call it... (Florida & California are usually refered to as sub-prime states - where most of the AAA rated RMBSs originated) @AJ .. Fair play.. I was looking at FK's 2009 report... Just for laughs check it out... http://www.guardian.co.uk/money/2009/may/26/dubai-property-crash when did Dubai every make it to country status?
You know what, you're right. Dubai never was a country, never will be. It was so stupid of the entire world to make comparisons between 'Dubai' (the city) and Switzerland (country), Singapore (country), Germany (country), Malaysia (country) & some other countries, whenever these were compared with reference to favourable tourist destinations. Those idiots never spoke for UAE when comparing to other 'countries' in similiar respect. I'm sorry, what? What's good for the goose isn't good for the gander? Ahh, I see, I see..... Maybe its time you learned what is meant by reading within context. And the article you referred was written almost a year ago. I am surely having a laugh, yes I am.
@dxbexpat and your point is? 1) Get a grip of yourself, and try not to take things personally. 2) When you average out declines over a country, the declines don't seem as bad... (i.e. include declines in Abu Dhabi and the other 5 Emirates); 3) Ask the families living in Florida - they too suffered over 50% declines; but obviously that is not highlighted by the FK report, because Florida's declines are cushioned by price changes in other US States - the price changes are lumped together and averaged out; 4) If you look at Dubai's property prices over the last 5 years.. The CAGR is still north of 20%; 5) If you were unfortunate enough to invest when the market peaked, then I'm sorry for your loss... It really is escalator up, elevator down - and seems to me you were caught just before the elevator down.
Yes, please stop complaining. Complaining is for helpless people stuck in a situation that they can see no way out of. If you are unhappy here, take a hint from so many posts, and leave. If you can't leave, as is the case with many, stop investing here. If you already have, sell and cut your losses. We invested here, in Ajman, Iran, Philippines and Malaysia. Malaysia has been absolutely fantastic. In every respect. The after sales service which is none existent here, is part of the deal there and believe me, you will get after sales service on the most professional level. The build quality is superior to anything I have ever seen here, even in Dubai Marina. And you get a proper lease back option which will generate an income for you. The property values did not appreciate in Malaysia as they did here. But they also didn't crash like they did here. If you are into long term, sustainable and sound investment, I would recommend looking to the east. Oh yes, you also get a 10 year visa in Malaysia. So wisen up, and please stop complaining!
@DXBExpat: Well, you are absolutely right!!It's the responsibility of the entire educated smart world that believed in Dubai and it's the responsibility of the entire educated world to bear the consequences. All those millions of expats who invested billions bought without any clear legal status (i.e.would the land of the villa belong to you or developer after few years?), poor finishing of many properties despite very high prices, no rights for a visa or pr or citizenship, very high mortgage rates with very harsh penalties from the bank, etc.... All of them should bear consequences. Where were their brains and top notch MBAs and experience and risk management and............. Good for Dubai / UAE that built its country!!!Now Medan and after the Olympics of 2020. Yes, Olympics 2020 seems to be happening 100%. Why do you think all the work is being done 24/7 non-stop around Al Khail road, Springs, behind greens, barsha although there is a huge short of cash in Dubai? Reliable sources in Switzerland told me that Dubai has very high chances to host Olympics in December 2020 beating Tokyo and Madrid! Once again, Dubai is playing it right. Dubai airport is the world's 6th busiest airport, by 2010, it will be the world's 3rd busiest int'l airport according to IATA. Yes, Dubai has made many big mistakes but Sheikh Mohammed is instrumentally dealing with all of them one by one with courage and perseverance. The former head of DIFC is behind bars to fight corruption!Switzerland failed to go to that extent when the corruption scandal of Swissair struck in 90s! Dubai is going now to its natural mission: Rely on service, trade, tourism, certain industries, transportation, exhibitions, and now sports! Real estate has never been an industry!It's just a service!Germans and Japanese are among the least owners of properties, yet they are the world's 2nd and 3rd economies! Dubai was smart. It made a boom benefiting from a global hype, built the city in no time and now back to regular business!