Knight Frank: Dubai housing prices saw the greatest drops

According to Knight Frank, property prices in Dubai have fallen by the most in the world.

Global House Price Index by Knight Frank for the second quarter of 2015 revealed that Dubai property prices decline indicators were the highest of all markets covered.

Due to the annual 12.2% decline in property prices Dubai was ranked 56th out of all 56 markets covered by Knight Frank. Housing prices in the emirate fell by 6.4% in six months and were down by 2.8% in the last quarter.

Among the main reasons for the decline in prices Knight Frank’s experts named three factors: the US dollar strengthening, the impact of regulatory measures on residential market and weakening demand.

However, there is no reason for concerns regarding further real estate market development in Dubai. Like many other experts before, Knight Frank’s analysts believe the fall in prices is felt as serious only at the background of the marginal market shift in other countries. Dubai property market has reached its alarming growth peak in 2014, so that even IMF expressed its concerns over the rapid prices growth. Therefore, the current decline is a minor correction of the overpriced real estate market.

Global house prices increased by 0.1% in the year to June, Knight Frank said. European housing market is no longer the world’s weakest real estate market, the title is has held for 15 consecutive quarters. China also saw a major decline in annual housing rates: property prices here have fallen by 5.7%, but increased by 0.2% in the last quarter. And in Hong Kong property prices were rising the fastest this year, despite its policymakers’ cooling measures: prices here increased by 20.7% year-on-year. Turkey and Estonia were ranked as the second and the third by Knight Frank’s Price Index, respectively.

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