Dubai is one of only three key real estate markets which are forecast to see luxury house price declines next year
Prime property prices in Dubai are forecast to fall by more than 2 percent next year, making it one of three key global markets to see declines alongside Mumbai and Hong Kong, according to a new report.
Knight Frank's Prime Global Forecast 2019 predicted a convergence of price growth across the world’s luxury residential markets, with Dubai prices set to drop by 2.4 percent.
Only prices in Mumbai (-5 percent) and Hong Kong (-10 percent) are set to see bigger decreases out of a total of 15 markets covered.
The proliferation of property market regulations, the rising cost of finance, uncertainty surrounding Brexit, and in some markets, a high volume of new prime supply, is weighing on prime prices, Knight Frank said.
However, key European cities are bucking the trend for lower growth, and are leading the rankings with prices expected to rise by 6 percent in Madrid, Berlin and Paris over the year.
Kate Everett-Allen, partner, international residential research at Knight Frank said: “Of the 15 cities monitored, the key European cities of Madrid, Berlin and Paris, lead our forecast for 2019.
"Still positive, but marginally down on 2018, the normalisation of monetary policy, weaker economic growth and a fragile political landscape post-Brexit will influence demand, but the relative value of these cities remains a key driver.”
Los Angeles 2%
New York 0%
Hong Kong -10%
Knight Frank said Vancouver has been the top performing prime residential market over the last 10 years with prices rising by 101.5 while New York comes bottom of the ranking recording price growth of 15.2 percent over the same period.