Dubai’s real estate market is set to slow down in 2023 due to an increase in interest rates, Invest-Gate reports.
As of February 2nd, the Central Bank of the UAE raised its base rate for the Overnight Deposit Facility (ODF) by a quarter of a percentage point to 4.65% after the US’ Fed raises interest rates by 0.25%.
Analysts, executives and industry stakeholders in the real estate market say that the majority of real estate transactions in the UAE are carried out in cash and it will not be impacted by higher interest rates.
Experts speculate that the market is expected to post a steady growth of up to 5% in 2023, down from 11% in 2022.
“2023 may see the real estate sector heading in a different way, partly due to the rising interest rate and the way it’s impacting consumers’ purchasing power. Of course, there will be growth but not at par with the previous year,” Zoom Property’s CEO, Ata Shobeiry, comments.
Shobeiry adds that the interest rate hike impact will be limited and the real estate market will continue its growth, but at a moderate rate.
It is worth noting that the value of total real estate transactions in Dubai soared 76.5% YoY to AED 528 bn in 2022.