A new global property price index suggests that the real estate market in Dubai is recovering with average prices rising 1.6% in the first quarter of the year.
The latest Knight Frank Global House Price Index shows that the emirate’s real estate sector, which has seen prices tumble more than 50% during the global economic downturn, seems to have turned a corner.
There is further good news for the real estate sector with reports suggesting that fewer units are expected to come to the market this year. There had been fears that property prices could fall again if there was a flood of new properties released for sale later in 2010 and 2011.
The latest report though from Harbor Real Estate suggest there will be 50,000 units, down from its previous estimate of 60,000. The Dubai Land Department is even more optimistic. It had predicted that there would be around 43,880 units released in 2010 but it now expects that there will be a 40% fewer.
Knight Frank said that residential property prices in Dubai were 2.4% up on the figures for the third quarter of 2009 but were still 8.2% down on the year.
It puts Dubai in 38th position on its index which compares 47 property markets around the world, an improvement since the third quarter of 2009 when the emirate was the worst real estate market on the index.
Ukraine and the three Baltic states continue to occupy the bottom rankings with declines of more than 30% year on year. The top performers remain the Asian economies of China, Hong Kong and Singapore, all recording annual growth in excess of 24%.
The index also revealed that prices in the first quarter of 2010 increased in 53% of the locations monitored, with the Asia Pacific region seeing the strongest growth with prices increasing, on average, by 17.8%.
Annual price inflation for all global housing markets moved into positive territory for the first time since the last quarter of 2008, recording 1.6% growth in the year to March 2010, Knight Frank added.
‘A recovery in the global housing market is undoubtedly under way. Even the markets in some of the worst performing markets such as the Baltic States and Ukraine are starting to experience some respite, with prices falling at a slower rate than previously,’ said Liam Bailey, head of residential research at Knight Frank.