Property prices in Dubai rose an average of 2 per cent in the first quarter of this year from the same period last year, marking the first year-on-year increase since the emirate's property bubble burst in late 2008, according to Colliers International. First-quarter prices were also up by 4 per cent from the fourth quarter of last year, the third consecutive quarterly increase, the property consultancy said.
The average price of property rose to Dh1,061 (US$288) per square foot in the first quarter from Dh1,022 in the previous quarter. Apartment prices increased by 6 per cent over the period and villa prices were 2 per cent higher. The price of town houses, however, fell by 4 per cent. Prices were now where they were in early 2007, Colliers said. They surged by as much as 43 per cent in the first three months of 2008 as speculators bought and sold off-plan properties.
But as the financial crisis took hold, prices fell 42 per cent between the fourth quarter of 2008 and the first quarter of last year. The rate of decline slowed to 9 per cent between the first and second quarters of last year. Despite the steadier prices, Colliers warns of further fluctuations as the emirate deals with an oversupply of property, low demand and tight liquidity. Colliers estimates that 41,000 residential units will be added to the market this year.
"There will be significant oversupply in the market by the end of the year, so it is anticipated the index will experience fluctuations in value going forward," said Ian Albert, the regional director at Colliers. firstname.lastname@example.org