Dubai: Interest rate hike unlikely to dent real estate growth, experts say

Dubai: Interest rate hike unlikely to dent real estate growth, experts say

Rising rates will have no major impact on the emirate's property sector as mortgage transactions represent only a quarter of overall home sales

Published: Mon 26 Sep 2022, 3:50 PM

Dubai real estate market will remain unfazed with the persistent increase in interest rates, and it will continue an upward trend but at steady pace on rising demand, experts say.

Analysts, real estate executives, property developers and market insiders said rising interest rates will have no major impact on the property sector as mortgage transactions represent only a quarter of overall home sales. However, they warned that the hike may impact the future demand and slow the growth rate of the market.

"There’s no doubt that higher costs of borrowing negatively impacts the real estate market. For Dubai however, that impact is not expected to be severe, as mortgage transactions represent only a quarter of overall home sales," Haider Tuaima, director and head of Real Estate Research at ValuStrat, told Khaleej Times.

Last week, the Federal Reserve raised benchmark interest rates by another three-quarters of a percentage point third time in a row and indicated that it will keep hiking well above the current level.

The US central bank has been looking to bring down inflation,