Price decline no obstacle to launch of new projects in Dubai

Dubai property prices declined by 5.2 per cent in the third quarter 2014, a UK-based Knight Frank report stated on Tuesday, but developers in Dubai continue to launch new projects as the emirate remains among the top global cities for real estate investment.

Prices have risen by 12.5 per cent in the year to September 2014 (Q3 2013 to Q3 2014), Knight Frank said in its latest global house price index.

“Dubai mainstream residential prices fell by 5.2% in the three months to September – the emirate’s first quarterly decline in prices in the last four years. The current mismatch between demand and supply is behind the fall,” said Kate Everett-Allen, International Residential Research, Knight Frank.

“Residential sales have fallen sharply in recent months and there is a steady stream of new schemes reaching completion, which in turn is exerting downward pressure on prices,” she added.

New project launch today

Omniyat Holdings, a Dubai-based developer, will unveil its new Dh600 million residential tower, Anwa, in Dubai Maritime City today (Tuesday).

‘Emirates24|7’ can reveal that more developers are planning to launch residential projects in Business Bay, Jumeirah Village and Dubailand master developments in the coming months.

This website reported earlier that buoyed by Dubai's being the host city for Expo 2020, developers launched 42 developments, which includes 17 villa and townhouses projects, this year till end-August.

Read: Dubai Expo 2020 impact: 42 projects with 11,250 units this year

Besides, this website had reported at least 43 stalled projects worth over Dh10 billion have been revived by the Dubai Land Department (DLD) through two of its real estate project revival initiatives.

Read: Dubai restarts 43 projects worth over Dh10 billion

HSBC Global Research, said in a recent report, that Dubai could 'fairly easily' absorb new supply even if the population grows less than 5 per cent per year.

Data released by Dubai Statistics Centre shows non-labour population jumped by over 7 per cent in 2012 and 2013, while the number of households grew by 7.6 per cent in both years.

 Ireland tops the chart

According to Knight Frank, it was the first time in two years the global house price index came close to falling into negative territory on the back of jitters over the global economy, a lingering malaise in Europe and, in the US, a slower-than-expected housing recovery.

Ireland now tops the table, having languished at the foot of the table for most of 2009 to 2012. Prices rose 15 per cent in the year to September but remain 39 per cent below their pre-crisis peak in 2007. Spain and the UK too saw an upturn, though in Spain’s case this translates into a slower rate of decline as opposed to positive price growth

In China, 58 of the 70 cities tracked recorded a decline in house prices over the 12-month period to September

With price growth in Dubai and much of Asia slowing, the Knight Frank Global House Price Index has lost its main engines of growth resulting in a rise of just 0.1 per cent in the third quarter of 2014.

Fewer countries are reaching the heights of double-digit price growth but no country has recorded an annual fall in house prices in excess of 10 per cent for three consecutive quarters, reflecting a slight convergence in the performance of the 54 housing markets tracked by Knight Frank index.

China’s slowdown continued with 58 of the 70 cities tracked by the National Bureau of Statistics recording price falls in the last 12 months while in the US price of a single-family home increased by 4.8 per cent, down on last quarter’s figure of 6.2%.

Analysis by world region shows the Middle East recorded the strongest price growth (9.5 per cent) in the year to September, the report said.
 

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