By Alex Delmar-Morgan
New survey reveals drop in value in final quarter of 2008, 10% rise overall last year.
House prices in Dubai dropped 19.1 percent in the final quarter of 2008, according to a new survey published on Monday, but overall values climbed 10.8 percent last year.
Just under 50 percent of the 55 locations surveyed across the world recorded positive price growth on an annual basis in 2008, according to the 2009 UK property adviser’s Knight Frank/Citi Private Bank Wealth Report.
By the final quarter, price growth was flat or had fallen in 75 percent of cities surveyed.
While Dubai joined Bangkok (22.5 percent), Jakarta (17.7 percent), Kuala Lumpur (15.8 percent) and Moscow (13.1 percent) in showing strong property price inflation in 2008, homes in the emirate were among the biggest price fallers in the final quarter last year along with London (9.4 percent), Monaco (10.7 percent) and Hong Kong (26.6 percent).
Liam Bailey, head of residential research at Knight Frank in London said: “It is now clear that not even the most desirable property around the world will remain immune to the global financial downturn.”
“The fact that some locations did manage to show positive growth, even as much of the world slipped into recession, is more of a reflection that different regions are in different stages of the economic cycle, rather than any inherent ability to ride out the storm unscathed,” he added.
“Even markets that have seen spectacular growth can turn very quickly. In Dubai, for example, prices fell 19 percent in Q4, as investors pulled out of an over-supplied market.”
Despite the price falls, the report found that 55 percent of high net worth individuals plan to increase their exposure to residential real estate over the next two years.
“The rich remain committed to property and we believe the quality of the best prime locations will still continue to attract buyers and will recover the quickest. Those markets fuelled by speculators and investors may not, however, return to recent highs for many years,” said Bailey.
The survey said that prime property in Monaco is the most expensive in the world costing an average of $75,253 per sq m. London and Manhattan are ranked second and third.
Despite the drop! --> Dubai is the regionâ€™s most transparent market, scoring at the top end of the Semi Transparent Tier (Tier 3). Dubai is currently achieving levels of transparency in line with those markets in Russia and ahead of those of the other BRIC economies (i.e. Brazil, India and China). Moreover, Dubai has registered the greatest improvement in real estate transparency of any market worldwide over the last two years. those two main facotrs will certainly lift Dubai RE market back on track once the crisis is over. I guess we have to wait and see.
Basel, what you say may be correct, but a fundemental thing that is missing in Dubai - REAL DEMAND FROM END-USERS.
Basel, it seems to me that you are very enthusiastic and encouraging about the RE market in Dubai, probably you are one of the buyers or flippers, we are not against of what Dubai did, we are proud of it, but there are many deficiencies happened specially in UAE when hiring professionals called professionals from Austria or UK to draw and streamline policies in UAE, unfortunately they failed as expatriates failed too due to dream and building fortunate in the air. What transparency you speak; about when price per sf starts in any launch at AED 1000 at 9am as an example and suddenly jumped to AED 1,100 in the same day within 30 minutes and by the end of the launch day it could reach AED 1,300, is it a RE market or stock market ? Did you hear about banks in any western countries financing off plan and for non residents by 90%!!!! Did you hear about developers are still collecting instalments from their customers for cancelled projects and the developers have not declared its cancellation!!! Did you hear about developers launch projects and sold it and even its location is still unknown!!! Really I like the word of transparency.
Eeny, meeny, miney, mo ... pick a number, and send out a meaningless press release that confounds and confuses. Saying without any qualification that Dubai house prices dropped 19 per cent in the last quarter contradicts all of the other piffle players in this debate. A little honesty goes a long way.
I completely agreed that Dubai realestate will bonce back once the crises is over,till such time wait & see. How ever bought a property in Dubai & Abu Dhabi with sound & good developers they will see the fast & sooner recovery for their investments. Good Luck !!
You cannot get a loan in India on apartment, if the apartment does not exist or approved by local planning authority. But in India you will get lot of fly-by finance companies who promise so much and people will put their money and lose everything. The fly-ny financier will take all the money and run away to another city. I find similarities here with respect to real estate.