The issue is both the fall of the ruble and the rise in prices. In addition, the increase in Russian interest was due to geopolitical reasons.
Updated at 17:10
Russians are no longer buying real estate in Dubai as actively as before, notes bloomberg, The reasons include the fall of the ruble and a 30% increase in local real estate prices over the past six months, as well as “disappointment” in life in this city. Due to these factors, Russians are increasingly selling purchased assets or abandoning previously concluded transactions.
From June to August, Russian clients bought real estate in Dubai for about $40 million, while selling it for $75 million, according to real estate agency Driven Properties. According to brokerage BetterHomes, Russians were the fifth most important foreign buyers of residential property in the city in the third quarter of the year.
Experts note the greatest decline in demand among Russian clients in the luxury real estate market.
managing partner Royal Home Real Estate Elena Timchenko
“There was a so-called bubble in this market – it’s a bit of artificial euphoria due to the political situation. Yes, the correction was caused by a decrease in the value of the dollar against the ruble – this is one of the important factors that makes money transfers difficult. This year, our Russians are not at the first and not even the second place in the list, but at the fifth place. Withdrawals of the asset are not possible at the moment, as those who bought in the early stages of construction last year will have to jump ship first to withdraw. At present, it is not advisable to take back the property. Maybe in a year, when it is already built, there will be other activities too. Now the activity has changed a bit, now the same people are trying to buy ready-made real estate, but it is not so easy. Who were the buyers? People with net worth ranging from $300 thousand to unlimited amounts. It was the luxury segment that jumped a lot last year. There were much more people who had unlimited amounts of money than people who had 300-500 thousand dollars. Some stabilization has already begun, stabilization is usually followed by some decline – the rule of any market. “I wouldn’t say it’s a dramatic decline, it’s an improvement.”
General Director of Consulting Company MACON Ilya Volodko
“If earlier purchases were mostly of investment nature, in the last one and a half years 80-85% of transactions are not for apartments, but for ordinary apartments with one or two bedrooms. Most of the buyers are middle class and slightly above middle class, that is, they are quite successful entrepreneurs who have their own businesses. By comparison, the procurement budget is approximately $250-300 thousand per item. But if we are talking about the UAE market, we need to understand that this market is quite big, strong and the interest in buying real estate in UAE can be seen from almost the whole world. And in this sense, the dynamics of Russian demand cannot but fundamentally affect real estate prices in this country.
Ekaterina Rumyantseva, Chairman of the Board of Directors of Kalinka Group
“Demand from Russians returned to normal at the end of 2021. And demand was quite active and high in 2021. If we take the weighted average real estate prices, there has been a marginal increase of 10 percent in real estate prices in Dubai. Russians primarily see Dubai as an investment market. The Dubai market is unprecedented because it is completely international and does not look like the real estate market, it is like the stock market. That is, they buy, sell and make money on flipping and high rental yields, because in addition to being an international business center and a resort, at least 8 million people visit Dubai as tourists. Prices in Dubai will not go down because the economic drivers are very strong. Accordingly, following factors such as population growth, GDP growth and development of an industrial cluster, all this helps in the economic development of the state and the Emirate of Dubai in particular; Almost 100% of the demand is international demand.
At the same time, brokers surveyed by Bloomberg noted that, despite the decline in demand for real estate among Russians, more and more Europeans, Americans, Chinese and Singaporeans are entering the local market. The main buyers remained Indians and the British, but the Chinese have also seen significant growth following the COVID-19 pandemic.