English Premiership footballer Jonathan Woodgate has bemoaned the fact he cannot find a property in London – despite earning £60,000 (Dh433,000) a week.
As property prices soar in ‘established’ old-world cities, homes in Dubai continue to offer some of the best value for money per square foot, say experts.
And property prices in the emirate and the wider UAE are expected to increase as laws and regulations give extra protection to would-be housebuyers and investors.
Prime property in London can command $3,600 per sq ft and super prime property goes for $8,400 per sq ft, according to a report by global real estate firm CB Richard Ellis.
The prices were described this week as “unbelievable” by Woodgate, who recently moved to London club Tottenham Hotspur.
However, high-end property in Dubai goes for around $610 per sq ft – the lowest price in the 12 cities analysed by CBRE – while so-called super prime homes and apartments can command prices up to $2,850, a mid-table placing even Woodgate would find attractive.
Mohammed Sultan Thani, Dubai Lands Department director of development and market administration, said Dubai’s prices would continue to rise as regulations are put into place.
“In terms of price, regulations and laws we have nearly everything in place and we are right now up to the mature markets,” he said.
“One of the things we are working on at the moment is mortgage laws and security for both banks and borrowers.”
Nick Jopling, Managing Director CBRE Hamptons International who worked on pricing properties for developers in Dubai, said: “The biggest question is why London is ahead of the rest of the world and New York and Hong Kong are behind in terms of prices” .
“Each city has its dynamics and a change in the dollar rate has pushed London rates higher. London is considered the world’s global city and it is easy to acquire property as the laws are well understood and it is a mature city.
“It is also the world’s financial centre which means the highest paid earners with yearly bonuses will work and live in London.”
Jopling said that, unlike Dubai, London had stringent planning laws and little space to build. Because London is heavily built up, there are few new builds.
However, a new development in the British capital – One Hyde Park – is further pushing up final prices.
Similarly, in Manhattan, new builds and the redevelopment of old hotels on prime real estate overlooking Central Park are fetching record prices.
Gregory Heym, chief economist with New York real estate firm Halstead Properties, said this year one such apartment was sold for $50m.
“Right now we are going through an extraordinary period. What is driving this is new builds such as the Plaza Hotel condominiums, and another is 15 Central Park West.
Prices per sq ft are hitting $6,300 – a record in New York. These are for super-luxury buildings with super locations and are a status symbol,” said Heym.
According to him many buyers were foreigners looking for prestigiously located properties. The market will also be boosted in areas around Wall Street, which has announced $33bn in bonuses this year for its workers.
CBRE’s figures are for the fourth quarter of 2007 and represent the highest prices achieved in those cities for top-end real estate.
In recent years Dubai has built a high number of luxury units both in its offshore islands and developments such as Downtown Burj Dubai and Dubai Marina, which has led many comparisons to Monte Carlo, where super prime prices are second only to London in terms of oppulence and cost.