Dubai Real Estate Market News:
- Dubai property prices up 8.8% year on year
- Apartments up 7.7%
- Villas up 15.8%
- Biggest month-on-month increase – Palm Jumeirah (1.9%)
- Biggest month-on-month decrease – Jumeirah Islands (-3.4%)
- Dubai rents up 24.8% year on year
- Average annual rent for a villa now AED 263,000 per year
- Highest average annual rental location – AED 935,000 Al Barari Villas
KP VIEW: With rents rising faster than prices, it could suggest that potential buyers are waiting to see what happens in the market before committing to a purchase, and continuing to rent. This comes amid rising interest rates making mortgages more expensive.
- Global stock markets suffered last week. The S&P 500 was down nearly 5%, due to the latest inflation report
- Overall US inflation increased by 0.1% in the month of August, but this was despite lower oil prices which means other components increased by more, specifically housing & food
- Expectations for another 75-basis point increase from the Federal Reserve this week, which will make the cost of borrowing even more expensive in the UAE
KP VIEW: With markets now pricing in a peak base rate of 4.4% in the US next year, this will mean most mortgages in the UAE are likely to be north of 6% by next year. This will be more than double the average rate in 2021, making property much more expensive to own. We therefore feel this could slow down the recent price increases, or even lead to declines next year.
- Salik IPO was so successful last week that they increased the size of the listing by 25% to allow more investors to participate. More IPOs of GREs (Government Related Entities) are expected in the coming months.
KP VIEW: This was a great sign of resilience and demand for Dubai Government Entities in equity markets, despite the ongoing global volatility in stocks.
