Unlike most places, prices are shooting up and demand is outweighing supply as overseas investors flood the red-hot market
While property prices in many locations around the world tumble, those in Dubai, in the United Arab Emirates (UAE), have recently been reaching new heights. However, this does not mean to say that a slowdown is not on the cards, as no country seems to be immune from the global economic turmoil.
According to estate agency Cluttons, prices rose 10 to 15 per cent across the emirate over the past 12 months. At the uncompleted Burj Dubai, already the world's tallest structure, prices have hit 14,500 dirhams (HK$30,682) per sqft, the same as a central London home - the world's second most expensive location according to the Knight Frank Global House Price Index. Developer IFA Hotels & Resorts says prices have risen 35 per cent a year at their projects over the past five years.
'Demand is very high,' says Alex Upson, partner at Cluttons estate agency which operates in Dubai and Abu Dhabi. 'It is a very heated market. There is a shortage of finished product in Dubai.'
Burj Dubai's prices are way in excess of the rest of the emirate. In the wider Burj Dubai district, Dubai's best address, prices range from a relatively modest 3,500 dirhams to 8,000 dirhams per sqft, Mr Upson says.
Other des res, or desirable areas, are the unromantic-sounding Business Bay and Dubai International Financial Centre. The latter is popular with the emirate's growing population of bankers and stockbrokers.
Pushing up prices is the supply and demand imbalance between the large number of people moving to work and set up business in Dubai, and the struggle developers have in completing projects. The population is growing 5 per cent a year, but rising labour and construction costs mean that work on many master-planned communities is overrunning.
