The dollar’s relative value — or how much it could gain against a basket of emerging market currencies — should influence the medium-term investor appetite for Dubai realty, Gulf News reported.
As things stand now, “the propensity for investing in Dubai real estate is at a five-year low point”, based on projections put out by Phidar Advisory, a property consultancy. This, according to Phidar, derives “from quantitative easing policies that erode foreign currencies to tax code amendments that stem capital outflows … events in foreign markets can amplify real estate demand and price volatility in Dubai, which, in turn, increases Dubai’s market risk”.
“Generally, the strong dollar tempers capital flows into Dubai … (while) weaker currencies create relative value in foreign markets and encourage capital outflows from Dubai,” according to Phidar. “The net result: a smaller investor base with yield sensitive capital in Dubai”.