Russian buyers help propel Dubai property sales to record levels

RUSSIANS were the biggest international buyers of Dubai real estate last year, when the city emerged as a safe haven amid geopolitical and economic uncertainty elsewhere, Dubai-based brokerage Betterhomes reported.

Once a niche group of buyers in Dubai, Russians’ interest in real estate there surged after the war in Ukraine, as their nation faced ever-tighter sanctions. This is helping to push the value and number of sales of properties to record levels. 

Dubai registered more than 86,000 residential sales transactions last year, surpassing a previous record of 80,000 in 2009, as indicated by Betterhomes. About 208 billion dirhams (S$74.8 billion) worth of property was sold last year, marking an almost 80 per cent gain from 2021. The increase in prices slowed to 11 per cent in 2022, from 21 per cent a year earlier. 

The property market in Dubai has bucked the trend in much of the world, where home values have dropped amid surging interest rates and a darkening growth outlook. Prices and rents in the emirate have also been buoyed by bankers fleeing strict lockdowns in Asia, Israeli investors, cryptocurrency millionaires and hedge fund executives. Dubai has also eased social restrictions and liberalised its laws to cement its position as the region’s top business hub.

In another report published on Monday (Jan 16), real-estate consultant Knight Frank said that a record 219 ultra-prime residences – properties worth at least US$10 million – were sold in Dubai last year. That is more than double the number of such purchases in 2021. 

The real estate sector accounts for about a third of the economy in Dubai, which is one of seven sheikhdoms that make up the United Arab Emirates.

European buyers dominated property transactions in the emirate last year, with British, Italian and French non-resident buyers in the top five. Indian nationals were third, while Chinese buyers fell out of the top five, as China’s strict zero-Covid policy restricted travel. 

Betterhomes expects a resurgence of Chinese investors in Dubai this year, as the Asian nation opens up. 

The brokerage last year started categorising buyers into residents and non-residents. In 2022, Indian residents were the biggest property buyers, followed by British investors and Russians. 

SEE ALSO

Dubai’s stunning property rebound lifts sales, rents to record highs

Dubai property price rises seen slowing further in 2023: Betterhomes

The growth in transactions was mainly fuelled by the off-plan segment, which rose by an annual 80 per cent, as developers boosted new properties.

Looking ahead, Betterhomes expects “more of the same”, said managing director Richard Waind. “Dubai is likely to continue to attract new residents and investors, ensuring transactions remain strong.”

But he added that as interest rates remain at elevated levels, affordability will be impacted, keeping “sales prices in the secondary market in check”. BLOOMBERG