Prime house prices in Abu Dhabi rose by the fifth-fastest rate in the world last year, according to a new report.
According to Knight Frank’s Global Wealth report, luxury house prices in the capital rose 14.7 per cent last year on average, placing them just behind those of New York, Aspen, Bali and Istanbul in a world survey.
The placing was a slight improvement on 2013, when the same survey ranked Abu Dhabi the eighth-fastest rising housing market in the world with a 15 per cent increase in prices.
However, the story in Dubai was very different. The city’s ranking in Knight Frank’s global prime house price ranking fell from seventh-highest in the world in 2013 to 60th last year.
According to the study, house price growth in Dubai slowed to just 0.3 per cent last year from 17 per cent in 2013 as new rules capping the amount of money buyers were allowed to borrow came into force.
“Last year was a tumultuous one for the Arabian Gulf region,” said Joseph Morris, Knight Frank’s head of capital markets for the Middle East. “After an extremely positive start to the year, continued political and economic instability in the Middle East, as well as sharp falls in oil prices, hit confidence hard across local capital markets.”
By contrast, JLL data found that average apartment prices in investment areas, which also includes prime property, in the capital, rose 18 per cent last year, while villa prices rose by 25 per cent. The property broker reported that in Dubai, investment area apartment prices increased by 23 per cent, while villa prices rose 12 per cent.
According to the Knight Frank index of prime house prices in 100 global cities, the value of luxury residential property around the world rose on average by just over 2 per cent last year, down from almost 3 per cent in 2013, brought down by flat or negative growth in 40 locations.
“Despite the more muted performance of the index this year, luxury housing markets continue to outperform their mainstream counterparts,” said Kate Everett-Allen, the head of international residential research at Knight Frank.
“The average price of a luxury home is 38 per cent higher than it was at the index’s lowest point in the second quarter of 2009. The average price of mainstream global property has risen by just 14 per cent over the same period,” she said.
Knight Frank reported that about 48,300 wealthy people – those with a net worth of more than US$1 million – were living in the UAE in 2013.
It said that over the 10 years between 2003 and 2013, about 10,100 of them had moved to the UAE, placing the UAE at seventh in a global ranking.
The UK was the top destination for wealthy people in 2013, the report found, followed by Singapore, the United States, Australia, Hong Kong and Canada.