Dubai's property market has seen the fastest rising prices in the world over the past year to the end of September, a new Knight Frank report has shown.
Prices in the emirate have increased by more than 28 percent since the third quarter of 2012, according to the Knight Frank Global House Index, compared to an average rise of 4.6 percent across the 55 markets covered worldwide.
The index showed that Dubai real estate values have jumped nearly 12 percent in the past six months and by 4.5 percent since the previous quarter.
"The index's strong performance has been assisted not just by headline grabbing price rises in Dubai, China and Hong Kong, but also in a number of emerging markets," said Kate Everett-Allen, associate at the London-based property consultancy.
Other strong performers included China, Hong Kong and Taiwan as Asian markets dominated.
Struggling southern European economies filled the lower reaches of the index, with house prices falling steeply in Croatia, Spain and Greece.
"There are still 17 countries where house prices fell in the year to September - all except three were located in Europe. Only Japan, South Korea and New Zealand interrupt Europe's dominance at the foot of the table," said Everett-Allen.
The recent increase in prices in Dubai has sparked fears of another price bubble being created.
But last month, Mohamed Alabbar, chairman of Dubai’s biggest developer Emaar, said the government will not allow "unjustifiable" rent increases to fuel a new price bubble on the back of the emirate's Expo 2020 win.
Concerns have been voiced that the 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.
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