With rents soaring and properties selling fast, Dubai's expat hub is in the midst of a housing boom backed by wealthy immigrants that has buoyed investors and burdened tenants.

Dubai, known for its towering skyscrapers and ultra-luxury villas, saw a record number of property transactions in 2022, largely due to an influx of wealthy investors - particularly from Russia.

This helped earn more than $140 billion last year, according to the latest official figures, marking a 76 per cent annual increase in transactions in the Gulf city-state's property market.

"The market has changed dramatically in the last year - good for landlords but not so good for tenants," said Jacob Fletcher of brokerage Betterhomes.

While Dubai may not be as oil-rich as the UAE capital Abu Dhabi, it attracts expats with tax breaks, a lush lifestyle and cheap services from labourers from Asia, Africa and the Middle East.

Real estate consultancy Knight Frank said properties were selling for more than US$10 million in Dubai's upmarket neighbourhoods, with 219 sales recorded in 2022 "more than the total for 2010 to 2020".

It said property prices in these prime locations jumped by 44 per cent in 2022 compared to the previous year.

"Dubai's luxury market is the fastest growing in the world, but still cheaper than major metropolitan cities," said Faisal Durrani, head of Middle East research at Knight Frank.

More than a decade ago, Dubai's property market slumped as a result of the financial crisis.

Now the city is attracting a large number of wealthy investors, including Russians fleeing the effects of sanctions after their country's invasion of Ukraine.

Russians were the biggest foreign buyers in Dubai's property market last year, according to Betterhomes.

Brits, Indians, Italians and French were also among the top investors, the brokerage said.

Entrepreneurs, corporate executives, bankers and celebrities were among the frantic clientele eager to buy a home in one of the first cities to open up after the Covid-19 pandemic.

"We're seeing a lot of clients from Europe who want to move here, who want their kids to go to school here, who want to start a business here," says Farhad Azizi, head of property development company Azizi Developments.

"So we're seeing lots and lots of new customers and they're keeping the market very busy."

The majority of Dubai's population of more than 3.5 million is made up of expatriates.

But the housing boom has made it more expensive for them to live in the city.

"The rental market has grown by about 20 per cent this year alone compared to last year," says Betterhomes' Fletcher.

The real estate sector accounts for about a third of Dubai's economy.

Residents of the city have become accustomed to the volatility of the property market, seeing prices plummet during the financial crisis and pandemic in 2009.

With global inflation on the rise, the rapid rise in rental prices in recent months has sparked panic among many.

"The market is so crazy. said one Western expatriate who has lived in Dubai with her husband and son for five years.

The family had to find a new home because their landlord had decided to sell the flat.

"The market is very, very different. So we will have to pay for a smaller, more distant place," she told AFP on condition of anonymity.