Dubai house prices up 10-15% in two months

If you need any confirmation that inflation is rampant in the Gulf States, just look at spiraling house prices in Dubai where gains of 10-15 per cent have been reported over the past two months alone.

Local Dubai newspaper Gulf News has today added a fifth property section, ‘Select Properties’ to add to its existing two sections for freehold sales and two for rental accommodation.

The economic tsunami of high oil prices, falling interest rates and record domestic inward investment are sending Dubai real estate prices spiraling upwards. Potential sellers are reluctant to sell in such a powerful market, further restricting supply in a market characterized by the delayed delivery of many new schemes.

But the recent leap in prices caught this correspondent unaware over his cornflakes this morning during a perusal of the multiple property sections. You can pick a villa or apartment in almost any location – completed or off-plan – and refer back to the offer price two months ago and see the price hike.

Traditionally this is now it for the first half of the year in Dubai with the hot summer months sending potential buyers to cooler climates, and making the physical process of buying a hot and sweaty business with site visits, documents to find and trips to the bank.

Will it be different this year? With this kind of momentum in the market I would expect activity will continue at a higher level than normal. Indeed, anybody thinking of buying might be well advised to take advantage of the relative lull from June to the end of August, as another 10-15 per cent price hike looks almost inevitable this autumn.

There are those who argue this might be a final price spike for Dubai property but then equally this could just be seen as an end to previously cheap prices in a new global city.