Dubai's real estate market was one of the worst performing in the world during the first three months of this year with house prices down by nearly four percent, according to a new report. Knight Frank's Global House Price index ranked Dubai 53rd out of 56 property markets analysed for annual price growth.
Only Ukraine, Cyprus and China performed worse for annual price growth, falling 15.5 percent, 8.2 percent and 6.4 percent respectively compared to Dubai's slump of 6.1 percent. However, the data also showed that in the last three months, only Ukraine saw steeper price falls, with a similar picture emerging for the last six months, during which prices fell in Dubai by 4.6 percent.
The real estate sector in Dubai has been among the most volatile globally over the past decade, swinging from boom to bust to boom again. Prices recovered to near peak values after falling by about half from their 2008 highs, but are now weakening again.Despite the cooling measures in place, Hong Kong led the rankings (up 18.7 percent year-on-year), due to tight supply pushing up mainstream prices, followed by Turkey (18.6 percent) and Ireland (16.8 percent).
The index showed that seven of the top 10 countries ranked by annual house price growth are now in Europe. Knight Frank said the Global House Price index recorded its weakest annual growth for three years, rising by just 0.3 percent in the year to March 2015.
Weighted by a country’s GDP, the index ensures countries such as China and the US have a greater influence than much smaller economies such as Jersey and Malta. With some of the larger economies such as Japan, France and crucially China all experiencing housing market slowdowns, this is masking the fact that overall we are seeing more sustainable growth amongst a larger number of countries.
Around 75 percent of countries tracked by the index recorded flat or positive annual price growth in Q1 - three years earlier this figure was closer to 47.2 percent.