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Dubai’s Luxury Property Price Growth Slows Sharply In Q2

Dubai’s Luxury Property Price Growth Slows Sharply In Q2

With 25 to 35 per cent of buyers in Dubai depending on mortgages, regulations that limit lending have been instrumental in easing the growth in luxury house prices.

Growth in prices of residential luxury properties in Dubai fell to 6.3 per cent year-on-year in the second quarter of 2014 from 11.7 per cent in the previous quarter, according to the prime global cities index released by property consultancy Knight Frank.

“The mortgage cap and doubling of transfer fees at the end of 2013 influenced buyer activity more than forecast,” said Kate Everett Allen, international residential research, Knight Frank.

“New research by Knight Frank revealed that 25 to 35 per cent of purchases are mortgage financed in the emirate, more than previously thought.”

She added that prices will pick up over the later half of 2014 due to a limited supply pipeline of luxury residences over the next 18 months.

Dubai was ranked 13 in the overall list of cities that saw a growth in prices of luxury homes during the first half this year, according to Knight Frank.

Out of the 32 prime residential markets that were tracked, 27 recorded positive annual price growth in the year to June, up from 21 from the same period last year.

Jakarta and Dublin registered the largest rise in price growth among luxury properties at 27.3 per cent and 23.5 per cent respectively, as per the index.

Other top markets that recorded a rise in luxury home prices include New York, Miami, Los Angeles and San Francisco along with Beijing, Sydney and London.

Prime residential prices rose by 6.2 per cent in the year to June 2014 in the 32 cities tracked by the index, up from five per cent a year earlier, Knight Frank noted.

“However, the index’s annual increase of 6.2 per cent in the year to June is above the long-run average of 4.6 per cent recorded since Lehman’s underlining the extent to which prime property has become a favoured asset class globally,” said Allen.

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