Property prices cool down in Dubai
Dubai luxury-home prices increased at the slowest pace in more than a year in the last quarter of 2013 as government measures to cool the emirate's rebounding property market took effect.
Values of prime apartments and villas rose 15pc in the fourth quarter from a year earlier, Knight Frank LLP said in a statement. Prices will increase by 10pc to 15pc this year, the London-based broker estimated.
Dubai's government has taken steps including doubling the transaction tax on homes to 4pc as it tries to avoid a repeat of the property bubble that burst in 2008. The central bank also imposed limits on the size of mortgages being offered to foreigners buying properties in Dubai.
Fourth-quarter value growth was the weakest since mid-2012 and a drop from an average increase of 21pc during the previous four quarters, Knight Frank said.
Despite the government moves, prices will continue to rise as the supply of new properties dwindles and business confidence is boosted by Dubai's selection as the site of the Expo 2020 world fair.
Prime-home prices are still about a third lower than they were at the market's peak, Knight Frank said. (Bloomberg)