Inflation rates, according to property analysts, won’t significantly limit Dubai’s real estate market rise.
The rise in interest rates may cause Dubai real estate to moderately slow growth after a record-breaking 2022.
The Central Bank of the UAE increased the Overnight Deposit Facility (ODF) base rate by a quarter of a percentage point to 4.65 percent as of February 2, 2023, from 4.4 percent.
The action was taken after the US Federal Reserve raised its policy rate for the ninth time in order to reduce inflation to within 2% of its target range.
“ As the ODF was raised to4.65 per cent from1.5 per cent in 2022, the purchasing power of consumers was impacted. This may affect in reduced demand, which, eventually, can impact property prices, ” according to the Zoom Property perceptivity.
The rearmost perceptivity data further bared that roughly 70 per cent of real estate deals in the UAE are substantially carried out in cash.
This is why the impact of the rising interest rate is going to be borderline on the request.
Ata Shobeiry, CEO of Zoom Property, believes that the impact will be limited and the request will continue its growth.
“ The time 2022 concluded on a remarkable note for the Dubai property request as it broke several records. still, 2023 may see the real estate sector heading in a different way, incompletely due to the rising interest rate and the way it’s impacting consumers ’ copping
power.
“ Of course, there will be growth but not at par with the former time, ” he said.
2022 saw a little over 11 per cent price growth. It was down from nearly 16 per cent in 2021, but that was substantially due to reduced prices because of the Covid- 19 epidemic.
As per an early estimate by the Zoom Property perceptivity, prices are anticipated to increase by 5 per cent this time due to strong demand in the request as high- net- worth individualities and foreign investors continue to pour in and invest in the sector.
“ The interest rate may reach4.90 per cent by the end of the time. But, the gratuities Dubai offers to entrepreneurs, investors, and end- druggies will continue attracting implicit buyers who’ll drive the request’s growth in coming times, ” Shobeiry concluded.
