Dubai property deals start showing higher interest rate dynamic

Dubai property deals start showing higher interest rate dynamic

Despite interest rates having risen, transactional volumes are occurring at a torrid pace (albeit with a greater emphasis on the offplan market and skewed towards the luxury end). In markets ranging from Toronto to Los Angeles, both prices and volumes have shrunk, which is to be expected given the surge in interest rates.

Despite tight inventory levels in those markets, prices had risen to well above 6x median incomes in many of those areas, and some sort of mean reversion was inevitable. In Dubai however, this has not yet transpired, despite the fact that moderate volume reductions have been more than made up by the value of sales. And brokers and analysts continue to gush over not only the buoyancy of the market but also about continued inflows expected from markets like China.

Youngish real estate pundits espouse advice that prospective buyers should just bite the bullet and dive in. And despite the fact that they may suffer awhile, things will even themselves out when they can refinance their mortgages at lower rates in a year or so.

What are investors to make of this?

In the US and Canada, post-Covid, there has been an off the charts moment in housing prices that continued