The value of luxury residential property in major Gulf cities grew at the slowest rate in Dubai in 2014, a reverse of historical trends, according to a new report.
Prime real estate prices in Abu Dhabi rose the most in the region and ranked fifth globally with a 14.7 percent growth while Dubai prices edged up by just 0.3 percent, Knight Frank’s Prime International Residential Index (PIRI) revealed.
The index also showed that luxury residential prices rose by 13.2 percent in Muscat (ranked eighth globally), by 6 percent in Riyadh (29th) and 5.3 percent in Doha (30th).
Some previously strong markets such as Dubai, which saw 17 percent growth in 2013, saw prices slow markedly due in part due to the UAE Central Bank’s mortgage cap, which is stricter for those purchasing properties above five million dirhams.
The dampening impact of this kind of prudent macro policy also explains the ongoing weak growth seen in Hong Kong (up 1.1 percent) and Singapore in 2014 (down 12.4 percent).
Mainland China mirrored this trend with prime price growth in Shanghai, Beijing and Guangzhou proving lacklustre at best.
Globally, the value of luxury residential property around the world rose on average by just over 2 percent in 2014, compared to growth of almost 3 percent in 2013.
The index was pulled back by flat or negative growth in 40 of the locations covered by PIRI, which now includes 100 key city and prime second-home markets.
However, 16 markets, led by New York (up 18.8 percent), did achieve double-digit growth last year. Three other prime US markets, Aspen (up 16 percent), San Francisco (up 14.3 percent) and Los Angeles (up 13 percent), fuelled by strengthening domestic and international demand, also made it into the top 10 of the index.
Kate Everett-Allen, head of International Residential Research, said: “Despite the more muted performance of the PIRI 100 this year, luxury housing markets continue to outperform their mainstream counterparts.
“The average price of a luxury home is 38 percent higher than it was at the index’s lowest point in the second quarter of 2009; the average price of mainstream global property has risen by just 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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