Out of the box

Will the global economic slowdown affect Dubai real estate?

Ismail Al Hammadi

January 24, 2023

Until this moment, there are still many uncertainties and ambiguities surrounding the global economic growth trends.

In its latest report, the International Monetary Fund lowered its expectations about the growth path of the global economy for the year 2023, indicating a decline in the growth of the United States economy, as the largest global economy, while the countries of the “eurozone” will not record any growth rate during the current year, with the continued impact and repercussions of The health crisis and the accompanying unrest and rising waves of inflation, in addition to the continuation of the Russian-Ukrainian war, which directly affected these economies.

Many question the strength of real estate markets, including the Dubai market, facing this slowdown, like other markets, due to the impact of companies and individuals whose businesses in these areas are linked to the emirate, which may affect buying, selling and renting.

But in reality, and according to current indicators, it is very unlikely that the Dubai real estate market will be affected by this slowdown. Currently in purchase, according to statistics from official agencies concerned with the real estate sector in these cities.

This is thanks to the high level of optimism about local economic growth for the current year and beyond, as the World Bank expects the UAE economy to grow by 4.1% in 2023, and more than 2% for the next year 2024, in addition to the continued growth of commercial traffic in Dubai and the growth of non-oil sectors. It has, foremost among them, the various industrial sectors that are currently witnessing great growth, and this reflects positively on the movement of the business environment and its continuous growth.

According to these data, the demand for real estate in Dubai may remain high in general, despite the global economic slowdown.

According to current statistics and developments, the real estate market in Dubai will remain strong, with the support of government plans aimed at developing infrastructure, the legislative system, to enhance the attractiveness of the business environment, and other services that may lead to an increase in demand for various types of real estate in the city, in addition to the efforts of companies Real estate related to developing the nature of the real estate product, and its various services to maintain demand and prices, bearing in mind that new real estate projects and smart real estate are currently driving the demand in the market.

In light of these data, caution remains required, and those concerned with the real estate sector in Dubai must analyze the global and local economic conditions well, in order to offer real estate services and products aimed at avoiding a decline in the performance of the sector, mitigating the impact of external conditions on the market, and enhancing investor confidence in them, just as happened in the conditions of A precedent that was more difficult than the current circumstances.

@ismailalhammadi

Ismail.alhammadi@alruwad.ae 

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