Booming home prices in Dubai are expected to keep rising – but at a slower rate for the rest of the year.
Average prices shot up by 33% in the past 12 months, according to international property firm Jones Lang LaSalle.
Rents also climbed by almost a quarter as the Dubai property market recovered from a post credit crisis slump.
However, few home prices are at their previous peak of 2008, before the values crashed.
Homeowners and investors saw prices jump massively after the emirate won the Expo 2020 bid.
“While they leapt by around 20% when the bid named Dubai as the site of Expo 2020 they slowed again in the first three months of this year,” said a spokesman for the firm.
“The growth we are seeing now is more realistic and more in line with what we would expect. Property investors are still driving the market and demand for all types of home is strong.”
A report on Dubai home prices published by the firm showed current year-on-year increases are running at around 15%.
“We expect this to stick around the same mark for a year or so until the government officially announces infrastructure projects and the key sites for the expo,” said the spokesman.
Not only are home prices and rents increasing in Dubai, but the emirate is also one of the world’s best performing hotel markets, said the report.
In turn, this is pushing up office rents – but mainly for prime selected sites rather than across the board, explained the spokesman.
Expo 2020 driving prices
“Optimism for investing in property is clearly focussed on homes in Dubai,” said the spokesman.
“Although hotel growth is key as tourism is one of the other main growth drivers of the economy. We expect to see a GDP return of around 4.9% this year.”
The Dubai Land Department has released figures that show property valued at £36 billion changed hands in 2013 – up from £25 billion the year before.
For commercial investors, the area neighbouring the proposed expo site to the south of the city is seeing prices rise in prime locations as the government develops infrastructure and transport.
“Demand will see prices for land and property in this area rise significantly as the expo date comes closer,” said the spokesman. “We should see retail and office rents and occupancy rise as well.”