Dubai property prices have grown two percent during the first quarter, in comparison to same period last year. This is the first such annual increase, after the downturn hit the property sector in the emirate, said a report by Colliers International, the UK-based real estate consultancy.
The house prices recorded a four percent rise during January to March since fourth quarter of last year, the third successive quarterly growth. The house prices are now on par with 2007 levels.
These positive developments show that confidence in Dubai residential sector appears to be returning in-line with Colliers Q1 House Price Index 2010 report, wherein the price index rose by 4 basis points in the first quarter.
While the results offer positive news for Dubai real estate market, the global real estate consultancy remains cautious about the coming year.
Despite the stability in the market, there remain several concerns. The market will see significant oversupply by end of the year, and therefore, the index may experience some fluctuations when going ahead. But, it is to be watched as to how much of that supply matches the end-user demand for community-oriented developments, said Ian Albert, Regional Director, Colliers International.
Colliers estimates that 41,000 housing units will enter market by end of 2010, mostly in low to mid-income categories. This additional stock is likely to create a downward pressure on property prices, although it is yet to be clear if this supply will bear a negative impact on established projects.