- City Fajr Shuruq Duhr Asr Magrib Isha
- Dubai 04:54 06:08 12:11 15:33 18:08 19:22
The status of being a safe haven for Middle East and North Africa buyers post Arab Spring has pushed villas prices in Dubai by almost 20 per cent in the year to September 2012.
The increase makes the emirate the second best performing market of the 26 cities tracked by Knight Frank Prime Global Cities Index.
In the second quarter report, the emirate, however, was positioned at the 12th spot, with a yearly increase until June 2012 being mere 2.2 per cent for apartments.
The villa market in Dubai has been outperforming the apartment sector for the past one year, with prime villa communities witnessing double-digit price hikes. In Springs prices have jumped by 25 to 30 per cent in the past one year, while Palm Jumeirah prices rose 25 per cent in the first half 2012.
In its third quarter report, the Knight Frank said prices of villas in Dubai increased 2.9 per cent in the quarter, while the price growth for the six months from March to September 2012 vaulted 11.1 per cent.
The global index rose by 1.1 per cent in the three months to September 2012, down from 1.4 per cent in the previous quarter. Five cities — Jakarta, Dubai, Miami, Nairobi and London — recorded double-digit price growth in the year to September. Jakarta was the best performing market with prices rising 28.5 per cent in the past year.
"Cities such as Dubai, Miami, Nairobi and London are increasingly considered investment hubs for high net worth individuals in their wider regions," the report said.
Knight Frank added that “in the wake of the Arab Spring, Dubai has been seen as a relative safe haven for MENA buyers while Venezuelan and Brazilian investors have looked to Miami to limit their exposure to domestic political and economic volatility."
Fifteen of the 26 cities recorded flat or positive price growth in the year to September, but over the last quarter that increased to 20 of the 26 cities.
The index now stands 18.7 per cent above its financial crisis low in second quarter 2009 with Hong Kong, London and Beijing having been the strongest performers over this period, recording price growth of 52.9 percent, 45.4 percent and 39.5 percent respectively.
Cities in Europe remained the weakest performers, recording a fall of 0.5 percent on average in the last 12 months. In Paris, although prices held firm in the third quarter, sales activity was muted as buyers of all nationalities adopted a “wait and see” attitude.
Last week, Citibank said recovery of Dubai’s real estate sector was in line with the wider economic upturn and strong economic fundamentals of the emirate.
In its monthly report, the bank emphasized 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.
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