Prices for Dubai luxury property keep falling

Housing prices in the Dubai premium property category declined by 4.5%, according to Knight Frank.

Prime Global Cities Index report by the analytical agency Knight Frank for the second quarter of the year showed that the price of the most expensive real estate in Dubai is gradually declining thanks to a waiting strategy taken by European investors.

Real estate prices in the Dubai premium property segment declined by 4.5% compared to the second quarter last year, and in the past three months, as of June 30, the decline was 2.5%. At the same time, if we consider the dynamics of luxury housing prices changing in the first half of the year, we can see that prices declined by about three percentage points.

According to these criteria of the premium property prices growth, Dubai took 30th place among 35 cities presented in the ranking of the Prime Global Cities Index. Among the reasons for such prices decline, Knight Frank experts named two basic points: it is the AED pegging to the US dollar, which has recently strengthened its position significantly, as well as the decrease in the activity of the two main demand sources for such housing, i.e. in the activity of investors from the Eurozone and Russia.

In general, premium real estate index by Knight Frank has risen by 2.5% per year globally, but in the first half of 2015 it remained practically unchanged. Although the number of premium housing markets, which experienced double-digit growth rates year-on year, decreased by half from four to eight units.

As for the annual growth in luxury property prices, the best results were recorded in the real estate markets of Vancouver, Miami and Sydney. And a minimum annual decrease in luxury housing prices was recorded in Singapore, where prices reduction in this market segment continued for the sixth consecutive quarter.

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