Dubai lags global markets for Q2 house price rises

Knight Frank index shows prices rose 1% in emirate; placed 23rd out of 55 markets surveyed
Dubai lags global markets for Q2 house price rises
By Andy Sambidge
Sat 08 Sep 2012 09:26 AM

Dubai house price rises lagged the global average in the second quarter of 2012, according to a new real estate index.

The Knight Frank Global House Price Index rose by 1.1 percent in the three months to June, but prices in Dubai rose by marginally less (1 percent).

The index also showed that prices rose by the same percentage over the past six months and were up two percent over the year-earlier period.

That performance placed Dubai in 23rd position out of 55 real estate markets surveyed 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.

According to the Knight Frank Global House Price Index, prices increased by 0.7 percent in the year to June with Brazil recording the strongest annual growth (18.4 percent) and Austria the strongest quarterly growth (8.5 percent).

Prices in 25 of the 55 countries monitored are now rising at a faster rate than they were a year ago, Knight Frank added.

European countries now occupy nine of the bottom 10 rankings in terms of annual price growth amid the continuing euro zone crisis, the index showed.

China, which alongside the US has the largest bearing on the world’s housing markets and has largely propped up the index since early 2009, is now providing mixed messages, Knight Frank said.

Although prices there are down 7.1 percent in annual terms they fell by just 0.1 percent in the last quarter.

Having seen prices fall by 34.7 percent peak-to-trough, the US housing market is gaining traction and prices are finally rising. Mortgage demand is up, new construction levels are improving and foreclosures are at their lowest level since Q4 2007, Knight Frank added.

"Despite the index’s 1.1 percent growth this quarter, there is likely to be little stimulus for the world’s housing markets in the near future," its Q2 report said.

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