Property prices in Dubai rose the second highest globally, registering a 20 per cent increase in 2012, a new global report has confirmed.
"Dubai stands out with strong growth of 20 per cent in the price of luxury villas during 2012… the emirate rebounded in 2012 on the back of a resurgence in demand," Knight Frank, a global property company, said in the Wealth Report 2013.
"This was aided by lower prices and underpinned by its [Dubai's] location as a strategic hub, able to attract wealth from the Middle East, North Africa, the Indian Subcontinent and Central Asia."
Jakarta (Indonesia) topped the list of 80 global cities surveyed with prices soaring by 38 per cent. Bali shared the number two slot with Dubai.
Miami (the US) took fourth place with a 19.5 per cent increase, with Sao Paulo (Brazil) coming fifth with a 14 per cent rise. Gstaad (Switzerland) with a 13.2 per cent came in sixth, followed by Auckland (New Zealand) 12.7 per cent. The eighth position was shared by Guangzhou (China) and Los Angeles (the US), where prices rose by 12.5 per cent. Shanghai (China) took the 10th position as price jumped by 10.8 per cent.
Last year, Citibank, a top global financial institution, said that recovery of Dubai's real estate sector was in line with the wider economic upturn and strong economic fundamentals of the emirate.
The bank had emphasized that Dubai's economic rebound and improved investor sentiment had breathed life into the real estate market in recent months with the volume and value of real estate transactions carried out in the emirate mushrooming since the beginning of the year.
"For investors, we think the economic recovery and pick-up in the real estate market is unambiguously good news in the near-term. They signal a strengthening in cash flows to the Dubai sovereign and its Government Related Entities (GREs), most of which have a significant stake in the local economy and, specifically, the property sector," Farouk Soussa, Middle East economist at Citi in Dubai, said.