House prices in Dubai have slumped by more than six percent in the past six months, according to a new report by Knight Frank.
Its Global House Price Index showed that between the end of June and end of December 2014, prices fell by 6.2 percent, making it the worst performing real estate market of 55 tracked by Knight Frank.
The index also said that Dubai house prices rose marginally by 0.8 percent over the past 12 months and dropped by one percent in the final quarter of 2014.
Overall, Dubai's real estate market was ranked 39 out of 55 countries around the world.
Globally, the index registered a fall in prices in the final quarter of 2014, its first quarterly decline in over two years.
The latest data underlined not only the fragility of the global economic recovery but the extent to which it is filtering through to buyer sentiment.
The Knight Frank Global House Price Index declined by 0.6 percent in the final quarter of 2014.
Ireland led the rankings with prices rising 16.3 percent in 2014 while Ukraine was the only country to record a double-digit price fall in 2014.
Europe was the weakest-performing world region in 2014, with prices rising on average by 1.6 percent.
Knight Frank said the outlook for 2015 is set to be dominated by two monetary policy decisions - one past, one future.
Firstly, the extent to which the ECB’s new QE programme will stimulate the Eurozone’s housing markets and secondly, the timing of the US Federal Reserve’s rate rise.
Kate Everett-Allen, international residential research at Knight Frank said: “In 2015 the focus is not just on the extent to which the US market is able to absorb an interest rate rise but the impact on those markets whose currencies are pegged to the dollar.”
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