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Sat 28 Jul 2012 09:32 AM

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Dubai house prices up 1.8% in Q2, says Knight Frank

Prime Global Cities Index ranks emirate 12th out of 27 real estate market around the world

Dubai house prices up 1.8% in Q2, says Knight Frank

Prices of apartments in Dubai rose nearly two percent in the second quarter of 2012, according to the new Knight Frank Prime Global Cities Index.

Sales prices across the emirate rose 1.8 percent between March and June, the index showed.

Prices rose 5.6 percent over the past six months, the index said, adding that 12-month price growth stood at 2.3 percent.

The increase in prices put Dubai in 12th position in the index out of 27 real estate markets around the world.

The real estate market in Dubai is slowly recovering after prices plunged 60 percent from 2008 peaks.

The number of residential real estate transactions increased 15 percent in the second quarter with the total value reaching AED7.1bn.

The average transaction value during the three months ending June 30 was AED1.2m, according to data from Dubai Land Department.

Globally, the index rose by 1.4 percent in the second quarter of 2012, its strongest quarterly price growth since Q4 2010

Prime prices across the 27 cities monitored increased by an average of 3.5 percent in the 12 months to June.

Bangkok (up 29 percent) was the strongest performer in the last 12 months while Tel Aviv was the worst performing market with prices down nine percent on the year earlier period.

Knight Frank said the outlook for most prime markets was muted, with price inflation curtailed by protectionist measures in Asia and the Eurozone crisis.

Since its low in Q2 2009, the index – which tracks the performance of the top five percent of mainstream housing markets – has been largely subdued, recording average quarterly growth of 0.8 percent.

James Price, of Knight Frank’s International Residential Development team, said: “The appeal of cities in stable economies is being brought into marked contrast with the investment environment in weaker countries.

"This city-level data should not however be taken as a reflection of the whole country; prime second-home destinations outside the cities may still perform well in a poorer performing wider market.”

Arabian Business digital magazine: read the latest edition online