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04 October 2023

Dubai 15th costliest city in world to own a house

The average price per square metre in Dubai's residential market touched $7,151 against $4,066 in 2008. (EB FILE)

By Parag Deulgaonkar

Dubai ranks 15th on the list of most expensive residential real estate markets in 2009, jumping six places from 2008, according to research group Global Property.

The average price per square metre in Dubai's residential market touched $7,151 (Dh26,250) against $4,066 in 2008.

Monte Carlo topped the chart, with $45,000 per sq m. The number two and three positions went to Moscow and London, respectively. Prime central Moscow's $20,853 per sq m price tag slightly outpaced core prime London's $20,756 per sq m.

London residential property prices have fallen for much of 2008, while Moscow property price declines only started in the last quarter, allowing Moscow to catch up with London. Both countries have experienced strong currency declines, it said.

Tokyo and Hong Kong come in fourth and fifth, respectively. New York, the only US city included in the survey, came in sixth, with an average price of $15,000 per sq m. Completing the top 10 most-expensive real estate markets were Paris at seventh, Rome at ninth and two other Asian cities – Singapore at eighth and Mumbai at 10th position. Average prices range in these cities was between $9,000 per sq m and $12,000 per sq m.

According to Global Property, the figures are based on the average price of a 120 sq m, good condition, high-end used apartment in the city centres of more than 110 cities around the world, typically the economic centres where most foreigners are likely to buy. The data was collected during 2008.

However, there are several places where property prices are relatively cheap, for example parts of the Middle East, Latin America and Asia.

Cairo, Egypt, is one of the cheapest cities in the world, with prime city centre prices at around $600 per sq m. Another Middle Eastern capital in the bottom 10 is Amman, Jordan, with average city centre prices at $1,150 per sq m.

Three Asian cities are included in the 10 cheapest, all located in rapidly growing and heavily populated countries, Bangalore in India, Chengdu in China and Jakarta in Indonesia.

Five Latin American cities complete the list of 10 cheapest cities for property buyers – Concepcion and Santiago in Chile, Quito in Ecuador, Managua in Ecuador, and Lima in Peru.

Rental yields will remain below five per cent in most European cities, suggesting property is still overvalued.

Rental yields are generally below four per cent in the following cities: Munich, Barcelona, Vilnius, Helsinki, Madrid, Rome, and Nicosia. Rental yields in Europe are lowest on Andorra at 2.2 per cent and Athens at 2.7 per cent. Rental yields are between four per cent and five per cent in major cities such as Brussels, Tokyo, Berlin, Moscow, Copenhagen, Warsaw, New York, Shanghai, Paris, London and Geneva.

Returns from rental investments are relatively low in Asian cities such as Singapore and Hong Kong and in almost all Indian cities (Bangalore, New Delhi and Mumbai).

High returns can be expected in Latin American cities. Yields range from eight per cent to 10 per cent in Panama City (Panama), Bogota (Colombia), Managua (Nicaragua), Santiago (Chile), Buenos Aires (Argentina), and Quito (Ecuador), the report said.