How US inflation effects the Dubai housing market?


2022-10-20 12:32:14

Have you viewed a house lately?

Hopeful new homeowners have fair number of options and getting on the property ladder has become more possible now. However, clouds of uncertainty are gathering over the horizon. What the prospective homeowners want to know is what these uncertainties look like and can they be explained.  

Our currency in UAE is pegged to the dollar, which has helped the economy greatly over the years. However our rates are dependent on US Fed rates. Rates are used by Central Banks to control inflation and the US Fed has a remit to bring the US inflation down to 2%. July inflation in US was running at 8.5%. The overheating economy has resulted in a tight labour market. The rising rates have had some effect though and the US unemployment rate ticked up to 3.7% in August from 3.5% in July.    

The good news is that the rate cycle might reverse a little in 2025. So the pain is hopefully short lived.