According to a recently published Forbes ranking of 'The Hottest Real Estate Markets On Earth,' which ranks real estate markets in 2012 based on the average house price growth, Dubai is ranked at No. 2, second only to Hong Kong, which saw house prices shoot up by a whopping 23.6 per cent last year.
The average house price in Dubai, on the other hand, rose by 19 per cent in 2012, but with the first three months of 2013 already witnessing a massive rise in home-buying interest among end-user expatriates as well as investors, this year could see Dubai rise to the top of the global ladder.
"The Dubai residential market has experienced further increases on the back of rising demand from relocations as well as new tenants," an Asteco report for the first quarter of 2013 said recently.
"Dubai housing prices rose 19 per cent in 2012, according to Knight Frank," the Forbes report maintains.
Indeed, according to Knight Frank's Global Development Review 2013, "there is noticeable demand for prime real estate in Dubai and the level of transactions increased through 2012."
Dubai real estate prices and rents witnessed 16th consecutive monthly increase in March, continuing the steady recovery in the sector and highlighting the return of investor confidence in Dubai, a recent report by Deutsche Bank said.
"The price recovery that started in late 2011 in prime properties is now spreading to second tier communities. Despite new supply, investor confidence remains strong, while main master developers are accelerating project launches," Deutsche Bank research analyst Athmane Benzerroug said.
The Asteco report for Q1 2013 pegs the quarterly rental growth for Dubai apartments at 3 per cent and those for villas at 4 per cent compared to Q4 2012. The year-on-year growth, however, amounts to a massive 19 and 21 per cent, respectively, for apartments and villas.
The same report suggests that sale prices rose even faster than rental values. "Sales prices fared even better with quarterly increases of 12 and 5 per cent for apartments and villas, and an annual growth of 27 and 24 per cent," it noted. Which suggests that a Dubai unit bought in Q1 2012 would have already added about a quarter to its value within the past one year.
According to the Deutsche Bank report, property prices in Dubai have witnessed a 6.2 per cent growth in the first three months of 2013. Since the second half of 2011, Dubai has witnessed an increase in project launches by locally-based master developers such as Emaar Properties and Nakheel.
Recent data from Dubai Land Department (DLD) shows that the total value of property transactions in Dubai rose 63 per cent to Dh44 billion in the first quarter 2013, compared with the same period last year, underlining the increase in activity.
Interestingly, demand for Dubai property seems to be coming from all corners of the world.
The Forbes report ranks the following 10 cities as the Hottest Property Markets on Earth:
#1 Hong Kong: 23.6% price surge in 2012
#2 Dubai: 19%
#3 Brazil: 13.7%
#4 Turkey: 10.5%
#5 Moscow: 10.2%
#6 Austria: 10.1%
#7 Taiwan: 9.7%
#8 China: 9.3%
#9 India: 8.5%v
#10 Colombia: 8.3%