Dubai’s real estate market is being boosted by wealthy Russians

by Editor

Russian investors have boosted UAE real estate.

Dubai real estate sales grew 45% in April and 51% in May.

According to the luxury real estate company Mira Estate in Dubai, sales to customers from Russia and other former Soviet countries increased by 100 percent year on year in the first half of 2022.

A corporate news release this week stated that real estate sales to these nations for the firm, which caters to Russian-speaking clientele, quadrupled year over year to 2 billion dirhams, or $500 million.

In May, Russian real estate salespeople from another firm exploded champagne bottles in a posh Dubai nightclub to celebrate record commissions on sales to fellow citizens buying their first homes in the desert oasis. According to a coworker who talked to CNBC anonymously due to professional limitations, one saleswoman earned 4 million dirhams in commission in just three months.

Roman Abramovich, a former Chelsea owner and close friend of Vladimir Putin, is rumored to be looking for a home on Dubai’s Palm Jumeirah, an artificial island chain shaped like a palm tree. The tycoon’s $350 million private plane has been in the emirate for four months since the U.S. Justice Department approved its confiscation.

Roman Abramovich, a billionaire oligarch and longtime friend of Russian President Vladimir Putin, reportedly wants to live on Dubai’s Palm Jumeirah. Abramovich owned Chelsea.

Russian and Commonwealth of Independent States (CIS) buyers have boosted the UAE property market. The CIS includes nine former Soviet nations in Eastern Europe, the Caucasus, and Central Asia.

“The war in Ukraine and the impact of sanctions on Russian-speaking individuals and their establishments have led wealthy CIS investors to flee their countries and find a haven in Dubai,” Mira Estate CEO Tamara Getigezheva said in her company’s release.

“CIS billionaires and entrepreneurs have been flocking to the UAE in record numbers, leading to a surge in demand for real estate. Most homebuyers are looking for ready units and waterfront properties.”

According to the Dubai Land Department, sales in the area rose by 51% in May and by 45% annually in April.

Russian buyers of real estate in Dubai rose two spots to fifth in a Betterhomes ranking published in April. A London-based citizenship-by-investment company predicted that 4,000 new billionaires would move to the UAE this year, making it the #1 destination for the ultra-wealthy.

The firm expects 15,000 millionaires to leave Russia.

According to Philippe Amarante, managing partner of Henley & Partners, “Roots in the UAE are suddenly becoming a must-have asset in any high-net-worth investor’s portfolio.”

Misha Glenny, journalist and author of the book “McMafia,” wrote in a post for Henley & Partners: “The UAE has experienced soaring rates of high-net-worth migration, primarily into Abu Dhabi and Dubai.”

Rich Russians fleeing Western sanctions have moved to the UAE and Israel, Glenny said.

Industry professionals say Russian buyers have a distinct preference for certain types of homes.

According to Tahir Majithia, managing partner of Dubai-based Prime Capital real estate, “mostly luxury properties, especially anything around the sea.” He mentioned the Palm Jumeirah, Emaar Beachfront, and La Mer villas.  They always prioritize locations with nice views of the ocean and close proximity to it.

Dubai’s Palm Jumeirah waterfront will have homes by February 24, 2022. Russians have always been among the top 10 nations investing in Dubai real estate, says Tahir Majithia of Prime Capital Real Estate in Dubai.

According to Majithia, buyers are looking for both investment and personal homes to own and rent. Popular block transactions involve buying multiple floors. According to him, a luxury apartment floor costs between $7 million and $10 million, depending on location and size.

According to Majithia, Russians have always been among the top ten nations investing in Dubai real estate. He said that “what we also discovered was that some of these buyers were also selling their assets in other countries and shifting those cash over here,” noting that there had been an increase since February.

Since Dubai’s leading real estate companies accept bitcoin, many Russian buyers do too.

Russian concerns and challenges are probably being addressed by many people, but any crisis would eventually be beneficial for Dubai, said Emirati real estate mogul Hussain Sajwani in an interview with CNBC in mid-March.

“I’ll be honest with you, these sanctions… they made a lot of people nervous,” explained Sajwani. “If anyone brings money through the banking system here legally and professionally, we’ll do business with them.”

You may also like