The UAE witnessed the highest global surge in property prices in 2023, according to the IMF, ranking sixth globally for the most significant increase since the pre-pandemic period. Bank for International Settlements data revealed a 10.4% rise in 2023 and 14.15% since pre-pandemic levels.
Industry experts attribute this to an influx of foreign workers and high demand from high net-worth individuals, resulting in double-digit increases over the past two years, particularly in the luxury property segment.
A shortage in residential property supply compared to population growth, with 50,000 new units added against a population increase of 100,000 in 2023, led to a scarcity of luxury and ultra-luxury units in prime locations, pushing villa and penthouse prices to record highs. In Dubai, per-square-foot prices hit a record Dh1,271 in November 2023.
Countries recording highest property price increase in 2023:
| Country | Change (%) |
| UAE | 10.39 |
| Mexico | 4.72 |
| Israel | 3.1 |
| Portugal | 2.42 |
| Thailand | 1.54 |
| Japan | 0.62 |
| Malaysia | 0.27 |
Countries recording highest property price increase pre-pandemic:
| Country | Change (%) |
| Israel | 23.7 |
| Portugal | 22.29 |
| US | 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’s broader analysis indicated that home prices in advanced economies, including the EU, Africa, and the Middle East, are 10-25% higher than pre-pandemic levels. Rising interest rates affecting residential mortgage markets and scarce housing supply contribute to this trend. The IMF suggests a need for continued cooling of real house prices globally to return to pre-pandemic levels.
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