The price of luxury villas in Dubai is rising faster than those in prime central London locations as the emirate's market recovery and potential further tax changes in the United Kingdom affect the appetities of investors.
According to the property consultant Knight Frank, villa prices in prime parts of Dubai rose 19.9 per cent over the year to September. Prime central London prices rose 10 per cent over the same period.
Dubai, which a year earlier came 17th in a table of annual price rises compiled by Knight Frank, recorded a 0.3 per cent fall in prices, shot to second place for the year to September. And London, which last year was third in the table, fell to fifth place behind Miami and Nairobi.
For the three months to the end of September, villa prices in Dubai rose 2.9 per cent, said Knight Frank. Meanwhile, properties in London increased by just 1.7 per cent.
Knight Frank's researchers found that prime house prices in Jakarta recorded the highest rise over the year, going up 28.5 per cent between January and October.
The news comes as figures released this week by the UK government's Land Registry revealed that although prices in the most well-heeled parts of London reached an average of £1.3 million (Dh7.5m), the total number of transactions in prime central London locations in the third quarter dropped by almost 9 per cent.
The decline was attributed to uncertainty and negative sentiment around changes in UK taxation scaring off investors.
"Cities such as Dubai, Miami and Nairobi are increasingly considered investment hubs for high net worth individuals in their wider regions," said James Price of Knight Frank's international residential development team.