The UAE’s GDP is anticipated to achieve over 5% growth in 2024, surpassing the global economy’s expected 2.8% expansion, per projections by S&P Global Ratings. Tatiana Leskova, Associate Director of Corporate Ratings at Standard and Poor’s Global Ratings, told the Emirates News Agency (WAM) that despite the global economy operating at subpar growth levels, the UAE’s GDP likely expanded by over 3% in 2023, with the non-oil sector experiencing close to 6% growth.
“In Dubai, we expect continued strong momentum in the hospitality, wholesale and retail, and financial services sectors to drive growth in 2024-2025,” said Leskova.
Resilient real estate sector
When asked about the performance of the UAE’s real estate sector amid global economic changes, she noted its relative resilience, attributing this to limited sensitivity to interest rates and controlled inflation. Despite higher interest rates, Dubai’s real estate market has seen a growth in mortgage transactions, with over 80% of real estate transactions completed on a cash basis.
In contrast, Leskova pointed out challenges in the European and Chinese real estate markets due to higher interest rates and tighter profit margins for leveraged developers. The US market, however, experienced an uptick in demand after a slowdown at the beginning of 2023.
Regarding changes in the buyer profile, Leskova mentioned a notable increase in Russian buyers in Dubai since 2022, albeit expected to be temporary. She anticipates Indians, Europeans, and GCC buyers to remain the most significant investor groups, emphasising Dubai’s attractiveness as an investment opportunity compared to other emirates despite broader economic growth and developments such as gaming hotels in RAK.
