DUBAI // Prime house prices in Dubai are rising the fastest anywhere in the world, rocketing 21.7 per cent over the last year and helping to push up the global average.
According to property broker Knight Frank the average price of prime property in Dubai increased 14.7 per cent over the six months to June alone and by 5 per cent between April and June.
Knight Frank, which tracks prime house price movements around the globe, said that prime property prices in Dubai have been rising since the second half of 2012, but now the emirate's mainstream property prices were also rising quickly.
It reported that the Dubai price hikes helped to push global prime house prices up by an average of 2.4 per cent - the highest rate of annual growth in three years.
House prices around the world crashed after the global financial crisis in 2008. Dubai was one of the worst hit cities then when house prices fell by as much as 65 per cent.
However, five years on Knight Frank says the situation is stabilising. It found that prices rose in 37 of the 55 countries tracked by the index in the second quarter of 2013 an increase compared with just 27 two years earlier.
Hong Kong was the city with the second highest house prices according to the index, rising 19.1 per cent over the year and 6.7 per cent over the last six months.
Taiwan was the country recording the biggest house price increases over the last few months with average prime prices up 7.4 per cent compared with the previous quarter.
For the first time since 2010 prime house prices in Mainland Europe also showed an annual increase, rising by an average 0.7 per cent over the last twelve months.
However, this was driven by 12.2 per cent average increases in prime house prices in fast growing Turkey while hard hit Greece saw the biggest house price falls in the world with values falling by 11.5 per cent.
For the forth consecutive quarter the bottom ten rankings in Knight Frank's list have all been occupied by European countries with Knight Frank blaming "tight lending conditions, high levels of consumer debt and rising unemployment" for depressing market activity.
Knight Frank reported that average house prices in Greece, Spain and Italy are now 31 per cent, 29 per cent and 15 per cent below their market peaks in 2007 and 2008.
Meanwhile, the fast growing economy of Brazil showed signs of cooling. Last year prices in the country rose 18.4 per cent but this year they slowed to an annual rate of 11.9 per cent.
"The medium term outlook [for global house prices] is muted," said Kate Everett-Allen, international residential research director at Knight Frank. "Europe has been the main drag on the global housing market's performance in recent years but growing confidence is being tempered by deterioration in the outlook for a number of the large emerging market economies."
lbarnard@thenational.ae
