Dubai’s house prices rose 20 per cent year-on-year in the second quarter of 2014 while recording moderate quarter-on-quarter growth, according to the House Price Index quoted in a new report by Colliers International.
The index, which was established in 2008 using actual mortgage transaction data from a consortium of financial institutions, showed that quarter-on-quarter price growth has slowed in 2014.
As per the report, quarter-on-quarter growth in house prices during Q2 dropped to three per cent compared to five per cent in Q1 2014.
The prices of apartments and townhouses rose five per cent in the second quarter while prices of villas remained the same in the second quarter.
Developments such as Palm Jumeirah, Motor City (apartments) and Jumeirah Lake Towers recorded the highest year-on-year growth in sales prices during the second quarter while Dubai Marina, Downtown Dubai and Jumeirah Lake Towers saw the highest number of transactions.
“The pace of growth over the last quarter has slowed considerably to a more modest level. This can be largely attributed to the forward thinking measures introduced by the government to dampen property speculation and safeguard the market,” said Ian Albert, regional director at Colliers International.
“While it’s too early to call a trend, the signs are mounting that price growth is easing back to a more sustainable pace.”
Despite a deceleration in the growth of real estate prices, the report said that property firms are optimistic about the remainder of the year.
Dubai property prices surged more than 30 per cent in 2013 after a bust in 2009 that saw prices plummet by 60 per cent.
In 2014, the emirate has also seen a large number of new properties being launched as real estate developers scramble to take advantage of the positive sentiments in the market.
Dubai’s biggest property developer Emaar launched a residential project BLVD Heights in Downtown Dubai earlier this week while Deyaar launched Montrose, which consists of two residential towers and a hotel tower in August.
Major developers such as Nakheel, Damac and Meraas have also actively launched projects this year while new players such as Danube Properties have also entered the market to cash in on the boom.