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Dubai property posts biggest price slump - 29 May 2009
Property in Dubai dropped in price by a staggering 40 per cent in the first three months of 2009, according to the latest statistics from the Knight Frank Global Price Index, published this week. The Emirate that has been at the centre of the largest property boom ever seen is now the scene of the biggest slump. Unsurprisingly, the price falls in Dubai have outpaced anything seen elsewhere on the planet – Singapore, the location to have suffered the second biggest fall at 16.2 per cent in the quarter.
The figures mark the latest stage in the extraordinary story that has been the property market in Dubai. The boom in construction and prices was fuelled by a huge shortage of supply when demand was at its highest, when developers literally could not build properties quickly enough and get them onto the market. Over 60,000 units have been delivered to market in each of the past two years, and prices still continued to rise. Even just a year ago, prices were rising at annual rates of up to 48 per cent.
The turnaround in property fortunes in Dubai has been so swift and severe that the bizarre situation has arisen where despite the 40 per cent drop in prices experienced in the first quarter of 2009, there is still a annual increase in prices compared to the levels of a year ago. Therefore, despite losing more than a third of their value, property in Dubai is still worth more than it was 12 months ago.
This is only a glimmer of good news for Dubai though. Most observers feel there is still some way for the Dubai property market to fall before the bottom of the market can be called.
The rest of the world did not fare too well in the survey either, with most seeing a decline in prices. Singapore suffered due to the terrible state it has been left in by the collapse in world trade. The UK saw a 16.5 per cent annual fall in property prices, among the most severe the world, but the quarterly figures were more positive, with the rate of price falls slowing to 4.5 per cent in the first three months of the year.
Other countries to suffer at the worst end of the figures were Estonia (down 9.9 per cent), Norway (down 6.2 per cent) and Denmark (down 6.1 per cent).
There was some good news for some countries, however. Jersey saw property prices rising by 5.6 per cent (taking property on the island even further out of reach for ordinary islanders and easier for offshore investors to buy). Finland (up 4 per cent), Thailand (up 2.7 per cent), Israel (up 2.6 per cent) and Switzerland (up 2.1 per cent) all saw prices rising.
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