Dubai rents increased almost 14% in 2013
Prime rents in Dubai grew by nearly 14 per cent last year.
Statistics released by global property consultancy Knight Frank showed the emirate was the second-best performing market in the world. Only Nairobi in Kenya performed better, achieving a rise of nearly 26 per cent.
The Prime Global Rental Index for the final quarter of 2013 revealed rents in Dubai grew by 13.6 per cent in 2013 when compared to 2012. In addition, prices increased 5.6 per cent between the months of June and December, and by four per cent in the three months to the end of the year.
Dubai is increasingly seen as a safe haven for investors in the Middle East, especially following recent unrest in countries such as Syria and Egypt. Demand is also said to have increased as a result of the decision to award the emirate the chance to host Expo 2020.
However, the study found although property in Dubai recorded the strongest amount of growth, rental prices were still half those found in established locations such as London and New York. In the case of Nairobi, the difference is as much as 70 per cent.
This was not helped by the fact the US metropolis saw its own rental prices increase by 3.5 per cent last year. The British capital, however, recorded a fall of 2.3 per cent over the past 12 months. This was said to be due to a contraction in the number of people employed in the financial sector.
Knight Frank said: "A two-tier market emerged in the second half of 2013 with secondary locations recording a stronger rate of growth than those in the emirate's prime developments."
Meanwhile, Dubai has also been named the world's best performing real estate market. The Knight Frank Global House Price Index showed mainstream property prices rose by 34.8 per cent over the last 12 months.
Despite this, the study showed rates in the emirate were still 25 per cent below the peak levels achieved in 2008.