Dubai's luxury homes market witnessed a decline in prices during the third quarter of 2014, Knight Frank revealed on Tuesday.
Its Prime Global Cities Index for Q3 showed prices of prime properties in Dubai fell by 0.2 percent between July and the end of September.
Knight Frank said the drop in prices was in part due to temporary factors such as Ramadan which led to weaker buyer activity but also due to the UAE Central Bank’s mortgage cap which is stricter for those purchasing properties above AED5 million ($1.36 million).
The index also showed that luxury home prices in the emirate rose by just 2.6 percent over the past 12 months and by 0.9 percent over the last six months.
The annual growth in prime property prices more than halved compared to figures released three months ago when prices were said to have increased by 6.3 percent year-on-year.
Dubai has also fallen down the index from 13th best performing real estate market tracked by the property consultancy in Q2 to 21st this quarter. The previous two quarters saw the emirate featured in the top two positions.
Globally, the Q3 index increased by 0.2 percent in the third quarter of 2014, its weakest performance in two years while prime residential prices rose by 4 percent over a 12-month period, down from 6.6 percent a year earlier.
Tokyo recorded the strongest quarterly growth while Jakarta saw the strongest annual rise in luxury prices.
Luxury homes in North American cities increased by 10.5 percent on average in annual terms, while European cities by comparison averaged a 1 percent rise.
Kate Everett-Allen, Knight Frank Residential Research: said: “Despite the prime index’s muted performance in the third quarter, luxury prices continue to outperform their mainstream counterparts. The average price of a luxury home on our index is 36 percent higher than it was at the index’s lowest point in the second quarter of 2009 whilst the average price of a mainstream property has risen by 14 percent over the same period.”For all the latest real estate news from the UAE and Gulf countries, follow us on Twitter and Linkedin, like us on Facebook and subscribe to our YouTube page, which is updated daily.
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