Five years after the global financial crisis the Dubai residential sector is showing strong signs of recovery.
The Colliers International House Price Index (Colliers HPI) showed an annual increase of 20.5 per cent in 2012. This followed a year of nil growth in the HPI in 2011 and a fall of 9.2 per cent in 2010.
John Davis, CEO of Colliers International in The Middle East, comments: “Our research indicates that the market bottomed out in 2010 and has been recovering ever since. Whilst this growth of over 20 per cent in Dubai’s HPI last year is an extremely welcome sign of recovery, I expect that this increase will stabilise once the new bank mortgage law is brought in later this year, restricting the loan to value ratios.”
The research states that a few key factors were significant in bringing about this growth, the most noteworthy being an increase in the availability and affordability of finance in the region; interest rates are currently between 4-7 per cent. A second factor behind this growth is Dubai’s status as a safe zone amongst the current political unrest in the Arab region. Another cause behind the increasing demand for Dubai’s residential property is the perception of the region as a tax and currency haven among foreign investors, especially with the UAE’s currency being artificially pegged to the US dollar.