Russians fleeing the war “blew up” the UAE real estate market

In Dubai, real estate sales have hit an all-time high and rents have soared to unprecedented levels. One of the reasons is the influx of Russians, writes Bloomberg, citing data from CBRE Group.

In total, according to the results of 2022, over 90,881 real estate transactions were made. The volume of sales last year broke the record of 2009, which had been holding for more than a decade, when 81,182 such transactions were recorded.

At the same time, the number of residential rentals grew by 11% in 2022 compared to a year earlier, reflecting the increase in city residents.

“It’s been an incredible year. This is the highest number of sales ever, partly because the supply of new homes is increasing, but also because demand has been strong,” CBRE head of research Taimur Khan told the agency.

The housing market in Dubai has grown, although the trend has been negative almost everywhere in the world. Most countries, property values ​​have fallen amid rising interest rates and an increasingly bleak economic outlook.

Housing prices in Dubai have soared in large part due to an influx of Russians who have been eager to move their assets in the wake of Russia’s invasion of Ukraine. According to Taimur Khan, Russian citizens mainly bought real estate in the luxury segment.

Another reason for the boom in the real estate market: bankers from China who fled from severe coronavirus restrictions, Bloomberg notes. They also supported demand in the housing market.

In 2023, property sales in Dubai will start to decline slightly, predicts CBRE. Now 70,000 new houses are being built in the emirate. This will bring down housing and rent prices.

In December, it was possible to rent a villa for an average of $76,000 per year, and an apartment for $25,000. Since the beginning of the year, the cost has increased by about 25%.

Since the outbreak of the war in Ukraine, the UAE has proven to be a safe and secure haven for Russian money and assets out of the reach of US sanctions.

At least 38 entrepreneurs or officials linked to Russian President Vladimir Putin own houses in Dubai worth more than $314 million, The New York Time reported, citing data from the Center for Defense Advanced Study.

However, the UAE may soon cease to be a comfortable jurisdiction for Russian money. Washington is in talks with the UAE, trying to convince the country of the importance of eliminating schemes to evade sanctions, a US State Department source told the NYT.

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