Monday, July 07, 2008

Dubai property market untouched by inflation :

According to a study by the International Monetary Fund (IMF), inflation in the UAE, estimated at 11 per cent in 2007, is set to drop to 9 per cent in 2008. The IMF's forecast of an easing of inflation came as economists warned of a 3 per cent surge in inflation across the GCC in 2008. The rising inflation in the UAE is mainly due to a weakening US Dollar to which the UAE Dirham is pegged against. A Dirham-Dollar peg means the region has limited ways to control inflation as central banks follow the monetary policy of the United States, where the Federal Reserve has slashed interest rates since the global credit bubble popped last year.

'Inflation will continue to rise for years. Expected inflation in GCC countries is to add 2-3 points in 2008 above its level in 2007.' Dubai property sales in 2007Upon studying the current trend of inflation across the UAE, we observe that contrary to expectations, land prices have been steadily heading north instead of declining. The total value of land transactions in Dubai last year was US$12.94 billion, according to Land Department. Some 2,329 land plots were sold in Dubai during April-June this year with a combined value"

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