House prices in Dubai have turned a corner and are up a little over 2 per cent in six months, according to the results of a latest global house price survey.
The quarterly survey conducted by global property consultancy Knight Frank shows that house prices in Dubai inched up 0.6 per cent in the first quarter of 2011, and prices are up 2.1 per cent in the six months ended March 31, 2011.
This is in sharp contrast to the falling numbers in the previous editions of the Knight Frank Global House Price Index, which was started in 2006 for investors and developers to monitor and compare the performance of mainstream residential markets across the world.
“The Middle East provides an improving picture. Dubai has seen price growth regain positive territory in the last six months and the consensus is that the market is stabilising following the volatility observed in 2008-2010,” said Liam Bailey, Head of Residential Research at Knight Frank.
Globally, house prices increased by only 1.8 per cent in the year to March, the lowest annual rate of growth recorded since Q4 2009, the company said. House prices in 25 of the 50 countries included in the index remained flat or saw negative growth in the first three months of 2011, compared to only 18 countries a year earlier, it added.
In regional terms, Asia remains the top-performing continent, recording 8.4 per cent growth over the last 12 months. However, this is down from 17.8 per cent a year earlier. The weakest region was North America which saw a fall of 0.4 per cent in values in the year to Q1 2011.
While house prices in Europe were static in Q1, this represents an improvement on 12 months earlier when house prices on average had fallen 4.1 per cent in the preceding 12 months. The strongest performing countries were: Hong Kong (24.2 per cent), where the government is fighting to pull inflationary pressures under control; India (21.9 per cent) and Taiwan (14.3 per cent).
“Price growth, while not stalling, has faltered in Q1 2011, pointing to ongoing problems underlying the world’s housing markets,” said Bailey. “In Q4 2010, overall annual price growth stood at 3.3 per cent. Three months later, this shrank to 1.8 per cent,” he said.
“In summary, we expect to see the current slowdown in global housing markets to continue, hitting a low point in Q4 2011 – assuming the Asian markets continue to cool and the government intervention is successful – but with a slow recovery in global house prices taking place in 2012,” Bailey concluded.