By Andy Sambidge
Knight Frank's latest Prime Global Cities Index says Dubai prices rose 0.6%, lower than the global average
Prime residential prices in Dubai rose by just 0.6 percent during the first three months of 2014, signalling a slowdown in growth in the emirate's booming real estate market.
According to Knight Frank's latest Prime Global Cities Index for Q1, Dubai's price growth between December 2013 and March was lower than the global average and way down on the 5.4 percent growth seen in Q1 last year.
Dubai was named the eighth best performing property market out of 32 covered, with average price growth of 11.7 percent over the past year.
The index also showed that growth over the past six months (September 2013 to March 2014) was 1.7 percent, a rate much slower than in the previous 12 months.
In March, Knight Frank named Dubai the world's best performing real estate market during 2013 with price growth nudging 35 percent.
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, prime residential prices rose by 0.8 percent in the first quarter of 2014 and by 6.1 percent over a 12-month period.
Jakarta, Dublin and Miami reported the highest annual growth, according to Knight Frank, with prices increases of 37.7 percent, 24.6 percent and 17.2 percent respectively.
While the rate of price rises slowed in Dubai, luxury price falls in Hong Kong and Singapore (5.2 percent and 8.7 percent respectively) reflected the continuing impact of cooling measures, the index said.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.
Reasons are simply because :
1/ liquidity has been directed to stock market
2/ Developers are controlling the whole r.e. Show
3/ investors are hammered by harsh rules of both RERA and developers
4/ Rera rent calculator jock!
5/ no compensation to the investor in case of years delay in delivery by developers.
6/ unreasonable service charges
7/ unreasonable community charges
Oh oh. 0.6% is not good. As owners we must take a united stance to keep scavenging the tenants. We have been parasitical, heartless and kleptocratic blood-suckers for the past two years. I really enjoyed that. I don't want to go back to the embarrassing situations where I would be desperate to find a tenant and lower the prices to a mere 'FAIR' amount. I hate fair.
Two reasons for the slow down.
The Mortgage Cap and Increased Transfer Fees, which results in a buyer buying with a mortgage requiring a minimum of 32% of the property value to buy a property.
Not only this but if you look at the figures on the DLD website it shows that for April the value of apartments (being the largest portion of the Dubai property market) transferred in April 2014 was 15% below that of the value transferred in April 2013. Also, May week one transfers are 11% below the same week last year (2013).
This shows a steady downward trend in transaction volume since the turn of the year and if this continues then prices will follow on the downward trend - the only question left is will it be a "correction" or a "crash" and by how much and for how long?
Nobody can predict the answers to those questions but it will make for an interesting few months!
What is certain is that we are about to turn from a sellers market to a buyers market - and when this happens it is anybody's guess what will happen next!
Well said !
8. No people. Immigration is way below increasing stock. Stop building. O wait we can't do that the entire economy depends on real estate.
Do a report on Off-Plan Properties purchased back in 2005 . We invested over 3 million dirhams for 5 apartments in Dubai Lagoon at DIP area by Schon Properties !
Where did our money go ?? ...We are still waiting for our apartments ! ..and The Schon Developer hasnt delivered one building
The property market here is largely based on cash purchases. It has already been established (by fairly reliable organisations like IMF) that the two initiatives you mention were merely for show and have next to no impact.
Of course both things affect people who need a mortgage, but don't be stupid! These are not the investors they want...
Simply put I'm an not going to divulge who i am but i know this market first hand better than most. Everyone talking about the rent calculator , only being a cash market or rental yields are very much offering uneducated opinion.
Currently Dubai is an attractive place for end users and investors BUT it has been made un affordable due to the mortgage cap, people who were looking at 5m+ villas or apartments can no longer afford as they need an extra 20% (1m AED on average ) plus extra 100k for extra 2% from DLD.
If they wanted to speed up the market and get the growth going again , they just uncap the mortgage again. Buyers will be a plenty as will Growth
The market is now what we can a buyers market , There are not many in the Market so have the choice and upper hand as some sellers now want to sell are reducing their price for the first time in a year.
In the long term the market has the ability to rocket, it will be controlled until a few years before the 2020, maybe 201
So fine ... fair or not fair. Too high for regular average earning individuals here ... not enough for owners to get a better return. Fine, I understand some areas getting the high growth ... but some areas in Dubai ... well ... what the ... Dubai Sports City studio went up to 50K ... why? On what basis? The other part of it is well, you have a quality project like Elite Residence, Princess Tower, Majara etc and then you have the older ones like Marina Diamond (Which I still are great) but they are not on the same level as former ... Someone needs to step in and sort this out ... why are places like Dubai Sports City ... IMPZ ... International City ... Dubai Silicon Oasis ... prices so high? Studio at 50k+? The community / infrastructure is not even completely setup ... seriously ... some karazy stuff ...