The Dubai housing market has grown thanks to the Russians
The rise in property prices in Dubai was 47%. The main factor in the price increase was the massive influx of Russian investors into this sector.
Dubai has long been an attractive place for wealthy investors and businessmen from all over the world. They come to Dubai in search of a stable market and a luxurious life.
In the UAE, almost 90% of the 10 million residents are foreigners. In 2022, a Russian wave came, which greatly affected the real estate market.
In recent years, in the first months of 2022, Dubai had the most booming real estate market. According to the Dubai Land Department, sales in this sector grew by 45% year-on-year in April 2022 and by 51% in May.
In 2022, more than 86,000 housing sales transactions were registered in Dubai, exceeding the previous peak of 80,000 transactions in 2009. Also, in 2022, real estate worth US$ 56.6 billion was sold, which is more than 80% higher than in 2021.
Alex Galt, founder of the AI company Realiste, said, "I would advise investors to closely monitor the current situation in the Dubai real estate market. Despite having experienced a boom thanks to Russian investments, it faces potential challenges ahead, such as sharp increases in rents and property prices. Investors should conduct thorough market research, assess risks, and consider diversifying their real estate asset portfolios to mitigate any potential negative impacts in the future."
Restrictions from the West on several Russian banks have made it difficult to open bank accounts and send money to the UAE for Russian citizens. But the UAE Central Bank granted a license to the Russian MTS Bank to start operations in February 2022, giving Russian investors a financial respite.
While the Russian wave of investment is waning, European investors are becoming the main replacement for Russian investors in the Dubai real estate market. They now account for about 30% of the market. In second place are Indian investors with a market share of about 20%. In third are the Chinese, who are unlikely to remain there by the end of the year.
"The real estate market is dynamic, and investor preferences can change, so it's important to keep an eye on current trends," Galt said.