Friday, January 22, 2010

Housing Price Index indicates market stability

Housing Prices are getting closer to their underlying values, which indicates that the market is beginning to stabilize, reveals Colliers International, the real estate consultancy firm, in their latest house price index for the fourth quarter of 2009.

The latest house price index for the fourth quarter 2009 indicates that prices remained stable during the fourth quarter of 2009, rising only by one percent, which puts it at the same level as in second quarter of 2007.

According to Ian Albert, Regional Director, Colliers International, the fluctuation in the index has been very low during the year at only 1.7 percent. Although, there have been ups and downs, there is a strong indication that the market had reached the bottom point. Every quarter to quarter there will be small variances in prices, as the market attempts to reach equilibrium.
During the previous quarters, the prices in the index increased 7 percent in the third quarter, and declined by 9 percent in the second quarter and by 41 percent in the first quarter.

The report states that the apartment prices have decreased by four percent during the fourth quarter of last year, in comparison to third quarter of 2009. The villa prices have increased by 7 percent in fourth quarter of 2009, compared to third quarter, while the townhouse prices have increased by 10 percent during the fourth quarter of 2009, in comparison to the third quarter.

The Dubai House Price Index has been compiled by using mortgage transaction data from five different financial institutions. The reports are based on figures released by brokers or by the land department, which could sometimes be historic.

The report's data is based on the number of mortgages purchased and how many properties have been bought. The data doesn't include cash purchasers, which could sometimes lead to misleading results, said Albert.

According to Albert, the future of real estate market is dependent on several variables. There are several things happening in 2010, which hasn't been witnessed before.

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