Dubai property prices cool in first quarter as government actions take effect

The rise in home prices in Dubai has slowed according to Knight Frank. Razan Alzayani / The National

Dubai home prices, which rose the most in the world over the 12 months through March, slowed in the first quarter after financial authorities took steps to cool the market, broker Knight Frank LLP said.

Values gained 3.4 percent in the emirate, slowing from 9.2 per cent a year earlier and putting Dubai behind Lithuania, Estonia and Malta for the quarter, London-based Knight Frank said in a statement. Dubai homes climbed 27.7 per cent during the 12 months through March, far outstripping China’s 17.5 per cent gain.

Dubai financial authorities have been trying to tame a market that has lurched between boom and bust since it was opened to foreign buyers in 2002. The UAE Central Bank has restricted mortgage lending and the Government doubled transaction fees as rapid price increases sparked concern that a bubble was forming.

Home values worldwide increased 0.6 per cent in the first quarter, compared with a 1.2 per cent gain in the previous three months, a Knight Frank index of 54 countries showed. Prices in the countries tracked climbed by an average of 7.1 per cent over the 12-month period.

“The final quarter of the year often sees a peak in sales,” Kate Everett-Allen, head of international residential research, said in the report. “Buyers rush to complete sales before the New Year when new tax rules often come into effect, leading to a quieter market in the first quarter.”

The worst-performing markets over the last 12 months were Croatia with a 9.7 per cent drop, Cyprus, which fell 8.7 per cent and Greece, where prices were 8.4 percent lower. It’s the first time since 2008 that none of the countries tracked fell by more than 10 per cent, according to Everett-Allen.

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