“Hello. Welcome to another edition of BetterInformed. This week we’ve seen two fairly major economic pieces of news coming into play and having an effect on the property market here in Dubai and the wider economy in general. They are currency shifts and interest rates.
The first one, currency, and in particular, the British pound. The British pound took a battering in the past week on the back of the growth of no-deal Brexit. As we sit here today on Thursday afternoon the pound is currently trading at 4.45 dirhams which is by far the lowest rate I could still remember for the last 2 years. Now, what does that mean?
Well, great news if you are British expat to send money back to the UK. Not so good news if you are in the UK looking to invest into Dubai. However, who can be a winner from this? The winner from this really could be British expats in Dubai looking to sell properties here. If you are looking to sell the property in Dubai and send the proceeds back to the UK it is certainly good news for you.
Secondly, we’ve seen the welcome news last night that interest rates from the Federal Reserve in the USA were cut by 25 basis points and then the UAE central bank followed the suit last night. So we have seen a 0.25 per cent reduction in interest rates in Dubai. Now, what does that mean?
Quite frankly it means a little bit of money in everybody’s pocket. Lower interest rates mean lower cost of borrowing which means we will have a little bit more money to spend in the shops, restaurants and not so much on our credit card bills and car loans. For property most importantly it means cheaper mortgages which mean more affordability for those looking to buy.
So two bits of interesting news. Certainly, there will be people out there and winners from both of those. And certainly, there will be people out there who will be interested in the reduction of mortgage rates and interest rates to buy their home over the summer. I hope that’s been of interest. Thank you for your time and we will speak again soon. Bye-bye.”
Group Managing Director