By Andy Sambidge
Knight Frank Global House Price Index shows prices rose nearly 35% but still 25% below 2008 peak
Dubai was the world's best performing real estate market during 2013 with price growth nudging 35 percent, Knight Frank has revealed in a new report.
The Knight Frank Global House Price Index showed mainstream property prices in the emirate rose by 34.8 percent during the last 12 months.
Although the increase slowed slightly in the last six months to 15.3 percent, Knight Frank said prices in Dubai were still 25 percent below their 2008 peak.
Globally, the Knight Frank Global House Price Index rose by 8.4 percent in 2013, with 11 markets including China, the US and Turkey registering double digit growth last year.
Ukraine, Croatia and Greece were the weakest-performing housing markets in 2013, Knight Frank said, adding that house prices rose in 39 countries of the 56 covered, compared with 27 in 2012
Knight Franks said improving employment prospects and the continuation of low interest rates in Europe and the US are together fuelling buyer confidence.
It added that several emerging markets, despite their economic wobble in 2013, still recorded a strong performance. Turkey, Brazil, Indonesia and Colombia were ranked in the top 10 in terms of annual price growth, each having recorded double digit growth.
Europe continued to dominate the lower half of the table but the rate of decline slowed in countries such as France, Spain and the Netherlands.
In November 2013, the Bureau of International Expositions (BIE) announced its decision to award Dubai the World Expo 2020, providing a boost to confidence to the emirate's real estate market.
In turn, developers announced a number of large residential schemes; however, most of these were at the mid-range end of the market rather than prime.
Dubai Land Department said in January that the total amount of real estate transactions in Dubai exceeded AED236 billion ($64.2 billion) in 2013, up from AED154 billion in the previous year.
Concerns have been voiced that Dubai's recent Expo victory could cause property developers to build too many residential and commercial projects, and investors to pour too much money into them, inflating a speculative bubble that would eventually burst.
Such a bubble popped in 2008-2010, when the global financial crisis caused Dubai property prices to crash by more than 50 percent, shaking financial markets around the world.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.