Interest rate hike unlikely to hit Dubai real estate market

Interest rate hike unlikely to hit Dubai real estate market

The consecutive increase in interest rates is unlikely to hit Dubai real estate, but it may cause a slowdown in the sector’s growth this year, experts say.

Analysts, executives and industry stakeholders said the majority of real estate transactions in the UAE carried out in cash and it will not be impacted due to regular hike in interest rates. They said the market is expected to post a steady growth of up to five per cent this year compared to 11 per cent in 2022.

“The year 2022 concluded on a remarkable note for the Dubai property market as it broke several records. However, 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,” according to Zoom property chief executive Ata Shobeiry.

With effect from February 2, 2023, 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 per cent from 4.4 per cent after the US Federal Reserves’ eighth increase in the policy rate to bring