In 2023, the UAE topped the global charts for the highest increase in property prices, as reported by the International Monetary Fund (IMF).
Over the past two years, industry executives have observed double-digit rate hikes, attributing them to an influx of foreign workers and heightened demand from high net-worth individuals.
According to IMF data referencing the Bank for International Settlements, property prices in the UAE surged by 10.4% in 2023 and 14.15% since the pre-pandemic era, ranking the country 6th in terms of property price escalation since then.
The IMF also highlighted the UAE’s position among the top 10 nations experiencing the most significant property price increases since the pre-pandemic period.
Industry experts attribute the surge to the substantial growth in population, with nearly 50,000 residential units added last year compared to a population increase of 100,000 in 2023 alone, resulting in an undersupply of luxury properties in prime locations and pushing prices to new highs.
Notably, in November 2023, per-square-foot prices in Dubai reached a record high of Dh1,271, surpassing the previous peak in September 2014, according to the Property Monitor.
The IMF’s latest update on the real estate market notes that home prices in advanced economies, Europe, Africa, and the Middle East are 10% to 25% higher than pre-pandemic levels.
Attributing the rise to increasing interest rates impacting residential mortgage markets, the IMF emphasized that housing affordability is stretched due to elevated home prices and higher interest rates.
During the first half of 2023, mortgage rates in advanced economies rose by over 2 percentage points compared to the previous year, leading to substantial declines in real house prices in countries like Australia, Canada, and New Zealand.
While some advanced economies experienced a more than 15% drop in home prices, emerging economies saw a less significant decline. The overall trend indicates that real house prices need to continue cooling from the highs of 2021 and 2022 to reach pre-pandemic levels.
Publish Date: 14 Jan 2024
Source: https://www.khaleejtimes.com/business/realty/uae-records-highest-property-price-increase-globally-in-2023-imf
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