Property prices in Dubai rose the second highest globally, registering a 20 per cent increase in 2012, a new global report has confirmed.
"Dubai stands out with strong growth of 20 per cent in the price of luxury villas during 2012... the emirate rebounded in 2012 on the back of a resurgence in demand," Knight Frank, a global property company, said in the Wealth Report 2013.
“This was aided by lower prices and underpinned by its [Dubai's] location as a strategic hub, able to attract wealth from the Middle East, North Africa, the Indian Subcontinent and Central Asia.”
Jakarta (Indonesia) topped the list of 80 global cities surveyed with prices soaring by 38 per cent. Bali shared the number two slot with Dubai.
Miami (the US) took fourth place with a 19.5 per cent increase, with Sao Paulo (Brazil) coming fifth with a 14 per cent rise. Gstaad (Switzerland) with a 13.2 per cent came in sixth, followed by Auckland (New Zealand) 12.7 per cent. The eighth position was shared by Guangzhou (China) and Los Angeles (the US), where prices rose by 12.5 per cent. Shanghai (China) took the 10th position as price jumped by 10.8 per cent.
Last year, Citibank, a top global financial institution, said that recovery of Dubai’s real estate sector was in line with the wider economic upturn and strong economic fundamentals of the emirate.
The bank had emphasised that Dubai’s economic rebound and improved investor sentiment had breathed life into the real estate market in recent months with the volume and value of real estate transactions carried out in the emirate mushrooming since the beginning of the year.
“For investors, we think the economic recovery and pick-up in the real estate market is unambiguously good news in the near-term. They signal a strengthening in cash flows to the Dubai sovereign and its Government Related Entities (GREs), most of which have a significant stake in the local economy and, specifically, the property sector,” Farouk Soussa, Middle East economist at Citi in Dubai, said.
How much space can $1 million buy?
Knight Frank Wealth Report further revealed that an investor could buy 169 square metre of prime space for $1 million compared to mere 16 sqm in Monaco, 19 sqm in Hong Kong, 23 sqm in London, 38 sqm in Singapore and 88 sqm in Mumbai.
Jones Lang LaSalle, a global property consultant, expects property prices in Dubai to rise but at a slower pace compared to last year. The prime villa segment saw a 20 per cent rise, while apartments mere seven per cent increase.
Emirates 24|7 reported earlier that Dubai’s prime luxury properties are much over 10 times lower than Monaco, the world’s most expensive residential property market.
According to the report, prices for properties in Dubai ranged between $520 and $580 per square feet (psf) in fourth quarter 2012 compared to prices of between $5,350 and $5,920 per square feet in Monaco during the same period last year.
In Hong Kong, property prices ranged between $4,570 and $5,050 psf; London $3,890-$4,300 psq; Geneva $2,720-$3010 psq; Paris $2,350-$2,600 psf; Singapore $2,340-$2,580 psf; Moscow $2,040-$2,260 psf; New York $2,030-$2240 psf; Mumbai $990-$1,100 psf and Sao Paulo $660-$730 psf.
Among the 20 cities listed surveyed by the report, Dubai was placed 19th with the last slot going to Cape Town, where prices ranged between $510 and $570 psf.