UAE - highest global real estate price growth in 2023: IMF.

Real estate prices in the UAE have risen by double digits over the past two years, driven by an influx of foreign workers into the country, industry officials say. Published: Wsk 14 Jan 2024, 11:44 AM.

According to data from the International Monetary Fund (IMF), real estate prices in the UAE in 2023 showed the largest increase compared to all countries.

The foundation also noted that the UAE is among the top 10 countries with the highest increase in real estate prices compared to pre-pandemic levels. According to the Bank for International Settlements, prices in the UAE rose by 10.4 percent in 2023 and 14.15 percent since before the pandemic. The UAE ranks 6th in the index of real estate price growth since before the pandemic.

Industry officials say prices have risen by double digits over the past two years due to the influx of foreign workers into the country, as well as high demand from high-income earners, which has led to record high prices. In addition, supply in the residential real estate market has not kept pace with population growth, which increased by 100,000 people in 2023, while only about 50,000 new housing units have been launched. This has led to a shortage of luxury and ultra-luxury apartments in prime areas, which has pushed prices of villas and penthouses in the country to record levels.

In November 2023, the price per square foot in Dubai reached an all-time high of AED 1,271, surpassing the previous high set in September 2014, according to Property Monitor.

Countries seeing the greatest increase in real estate prices in 2023:

• UAE: 10.39%
• Mexico: 4.72%
• Israel: 3.1%
• Portugal: 2.42%
• Thailand: 1.54%
• Japan: 0.62%
• Malaysia: 0.27%

Countries that experienced the highest increase in real estate prices before the pandemic:

• Israel: 23.7%
• Portugal: 22.29%
• USA: 19.15%
• Japan: 15.29%
• Netherlands: 14.4%
• UAE: 14.15%
• Australia: 9.24%
• Mexico: 8.44%
• Hungary: 7.71%
• New Zealand: 7.68%

The IMF noted that housing prices in developed economies, including most EU countries, Africa, and the Middle East, are 10-25 percent higher than pre-pandemic levels.

In the first half of 2023, mortgage rates in developed countries rose by more than 2 percentage points compared to the previous year. At the same time, countries like Australia, Canada, and New Zealand saw a significant decline in real housing prices, likely due to the high share of variable-rate mortgages and housing prices that were inflated even before the pandemic. In contrast, in developing countries, housing prices decreased by less than 15 percent. However, overall, real housing prices will continue to decline from the peaks reached in 2021 and 2022, aiming to return to pre-pandemic levels.