Dubai remains the best performer and has topped the list of Global Property Guide's house price survey for the fifth consecutive quarter, with house prices rising 31.57 per cent during the year to Q1 2014.
In the first quarter, prices rose by 9.58 per cent, said the UK-based research house covering residential market trends in 101 countries.
"Property demand is surging,” the report said, stating Dubai Land Department's (DLD) data that revealed transactions rose 11 per cent during the year to Q1 2014, compared to the same period last year, while transaction values jumped 38 per cent year-on-year to Dh61 billion.
"We expect the next three quarters to be similarly active,” said Sultan Butti Bin Mejren, Director General, DLD, "especially as this period follows the launch of a number of stimulating economic projects in Dubai and the disclosure of some of the preparations for the city's hosting of Expo 2020."
Emaratis are the biggest investors in the Dubai realty sector, followed by Indians, Britons and Pakistanis, according to DLD.
From Q3 2008 to Q3 2011, house prices dropped by 53 per cent, mainly due to the global financial meltdown. Then in Q2 2012, Dubai's housing market started to recover, thanks to robust economic growth, the availability of finance and the city's status as a safe haven.
The U.A.E.'s economy grew by 4.8 per cent in 2013, after 4.4 per cent in 2012, 3.9 per cent in 2011, and 1.7 per cent in 2010. The IMF growth forecast for 2014 is 4.5 per cent, or more.
Earlier this month, UK-based Knight Frank said house prices rose 27.7 per cent over the 12 months to March 2014, the fastest pace among the 54 countries tracked by the consultancy's global house price index. However, prices have climbed mere 3.4 per cent in the first quarter 2014, slower than the 9.2 per cent growth registered during the same period last year.
In May, analysts with Standard and Poor's, a global ratings agency, told Emirates 24|7 that residential property prices in Dubai were almost reaching 2008 peak levels, with the market unlikely to see any major price correction in the short term.