Prices of prime apartments and villas in Dubai grew slower in the fourth quarter of last year compared to the preceding quarters due to a number of 'cooling' steps taken by the authorities, a report said.

The prices increased 15 per cent year-on-year in the fourth quarter. However, it averaged 21 per cent in the preceding quarters, said the report by Knight Frank, a leading property consultancy.

The deceleration in price gains may be attributed to a number of ‘cooling’ measures that were introduced in the final half of the year, including the doubling in the transfer fee to four per cent and new mortgage caps, it said.

Developers have announced a number of large residential schemes, most of which were at the mid-range end of the market rather than ‘prime,’ with the World Expo 2020 win, said the statement.

Victoria Garrett, residential associate director, said: “New units worth Dh10 million ($2.7 million) or over are expected to account for almost 10 per cent of existing stock in 2014, but nearly all of these will be villas located on one development. Moreover, our estimates show that this figure will fall to 1.6 per cent in 2015, before rising to 4.6 per cent in 2016.”

The consultancy expects the prices to rise by 10 to 15 per cent this year, with the differential between prime apartment and villa prices closing as the former outperforms. - TradeArabia News Service