Demand for Dubai property is increasing

The departure of Russian nationals from the country was widely reported in the year following the start of the Russo-Ukrainian war, with speculation that sanctions had led them to the Middle East, particularly Dubai, rather than Europe or the United States.

The exodus of Russians was particularly noticeable during the outbreak of the war, and also during the mobilisation of 300,000 reservists announced in September.

But what impact has the arrival of Russians in Dubai reportedly had on the city's economy, particularly the property market?

It was a remarkable year for Dubai-based agents in 2022, with the Metropolitan Group reporting AED 11 billion (US$2.995 billion) in sales, up 130 per cent on 2021.

And demand isn't slowing down. Better Homes LLC, for example, saw 200% more transactions in January and February 2023 than in the same period in 2022. The agency reported significant demand in Russia in the first half of 2022.

Elias Hannoush, managing director of Morgan International Real Estate, said the Russia-Ukraine war has undoubtedly had a positive impact on Dubai's property market, but it is not the only driver behind the recent boom.

He puts it down to "a confluence of factors", including positive sentiment around the way the government is handling the pandemic, investors gaining more residency and momentum following Expo 2020 and the FIFA World Cup, which has kept high net worth investors focused on the region.

A real estate agency said the average price paid by Russians for Dubai property in the past year was $1 million, with some buying up to 10 units at that price.

The exodus of Russians was particularly noticeable during the outbreak of the war, and also during the mobilisation of 300,000 reservists announced in September.

But what impact has the arrival of Russians in Dubai reportedly had on the city's economy, particularly the property market?

It was a remarkable year for Dubai-based agents in 2022, with the Metropolitan Group reporting AED 11 billion (US$2.995 billion) in sales, up 130 per cent on 2021.

However, while investors and buyers in Russia may not have had the most serious impact, the economic uncertainty caused by the war has certainly prompted individuals and companies in Europe to consider the emirate as a permanent location.

Simon Baker, managing director of haus & haus, agrees that there has been a large number of Russian and Eastern European clients in the past year.

"But that's not the only driver; there are a number of different political and economic factors around the world that seem to be creating the perfect storm for migration to Dubai," he says." It's mainly high net worth individuals looking for a safe haven for their businesses and families."

Another real estate source told Zawya that the surge in Dubai property prices meant that some Russian investors had invested since the start of the war and then sold them at a profit, a practice known in real estate circles as "property speculation".

Buyers spent an average of about $1 million (AED 3.67 million) per property, although some wealthier investors bought up to 10 units at that price.

He said these investors included those fleeing high interest rates or economic uncertainty, as well as "big money" VVIPs, which included Russians looking for a safe haven for their money or relocating.

He also observed that the 'influx' of Russians has opened up other relocation opportunities for more Russian nationals, including a younger generation of social media influencers, tech startup founders, and employees of blockchain and cryptocurrency companies who are moving their businesses to the city to cater for the growing demand.

Real estate agencies and brokers who are highly focused on selling to Russian clients are also emerging, he added.