According to a report released on Monday, Dubai had apartments and villas transactions totaling Dh61.9 billion between January and May 2022, demonstrating how the real estate industry has performed well even as global economies struggle to combat inflation amid tightening markets.
According to a senior official at Knight Frank, residential property in the emirate will continue to be a great inflation hedge, with apartments price rises expected to hover around 5-7 percent in mainstream markets and 12-15 percent in top markets.
By far the most effective measure is the government’s proactive move to freeze the prices of 11,000 basic products, including milk, bread, meat, and chicken. He noted that the rise in crude oil prices has bolstered the policy, which will ensure a strong recovery in economic development.
Using Oxford Economics data, Knight Frank forecasts a rebound in Abu Dhabi’s GDP growth this year from around 0.5 percent to slightly more than 6 percent. Dubai’s GDP is expected to grow at the same rate as last year, aided by a wider resumption of global travel and the emirate’s attractiveness as a global vacation destination.
The UAE’s all-important non-oil sector’s recent PMI score remained stable at a 12-month high in April as orders continued to rise, indicating that the economy’s relative optimism is filtering through to corporate activity levels.
“According to the April PMI readings, businesses are clearly concerned about rising cost pressures.” A reduction in the rate of new hires and passing on costs to consumers are two immediate pressure release valves. “The latter is frequently viewed as a last resort, and we haven’t seen that yet,” Durrani said.
The residential market is still relatively safe
“The UAE’s fiscal policy correlates with the US,” said Ashley Bayliss, Partner – Head of Mortgage and Debt Advisory at Knight Frank. “The recent 50 basis point hike in interest rates to 2.25 percent does mean higher outgoings for mortgaged households going forward.” It is, however, comparable to other international prime markets.”