Analysts predict an explosive growth in demand for the purchase of real estate in Dubai from the Russians in 2023. According to the results of the year, the growth may reach 200%. We analyze the reasons for this phenomenon and the prospects for the Dubai real estate market for the next year.
Dubai instead of Turkey - demand for real estate has risen sharply
Against the background of the devastating earthquake in Turkey and Syria, which occurred in early February and claimed the lives of more than 17 thousand people, Russians have become more interested in real estate in Dubai and the UAE. Brokerage agencies reported that many clients have changed their minds about buying property in Turkey and are considering options in Dubai.
In 2022, it was the citizens of Russia who became the leaders in buying real estate in Dubai and the UAE among foreigners. Nevertheless, according to the results of the year, Turkey became the most popular country for investing in real estate among Russians. Due to recent events in 2023, this place, according to experts, may be occupied by the UAE.
Analysts in the real estate sector expect that in the first half of the year the demand for real estate in Dubai and the UAE from the Russians will grow by 30%, and by the end of the year it may reach 200%.
During the first week of February, 120% more transactions were registered in the real estate market in Dubai than in the same period last year. According to forecasts, the recovery in the market will continue further.
Why do Russians buy property in Dubai
Reasons why Russians prefer to invest in real estate in Dubai:
- the desire to preserve capital due to the unstable economic situation
- the ability to quickly return the investment by reselling or renting out real estate. Buying real estate under construction in Dubai allows you to sell it in the future for at least 20% more expensive. Rent brings 8-15% annual profit. This is higher than in Europe and the USA.
- favorable conditions for the purchase of real estate from the developer at the construction stage. Down payment at the booking stage is only 10%.
- no taxes on income when renting or reselling real estate
- variety of offers in the standard and elite price segment
- the opportunity to obtain a resident visa when buying real estate from 205 thousand $
Who else is investing in real estate in Dubai
Hussain Sajwani, CEO of the developer DAMAC, believes that in 2023 it is worth waiting for an influx of investors from China. This is due to the next wave of the coronavirus pandemic in the country and the resulting political and economic risks.
According to the Financial Times, in addition to Russians, investments in real estate in Dubai are of interest to Europeans, citizens of India and Asian countries. For European citizens, the main incentive to buy property in Dubai is the warm climate and low taxes.
The real estate market in Dubai and the UAE - the results of 2022
2022 has broken all records in the real estate market in Dubai. During the year, 97 thousand transactions were made, which is 60% more than in 2021. This is a historical maximum for the entire existence of the market. The total value of the facilities was 71 billion $ (75% higher than in 2021). This data is provided by Bloomberg.
The real estate market in Dubai and the UAE is not overheated. According to the UBS Global Real Estate Bubble Index 2022, this is the coolest market in the world. Thus, there is no risk of a bubble in the real estate market.
Against the backdrop of rising demand, prices for real estate in Dubai are increasing. In 2023, Knight Frank agency puts Dubai in 1st place in the ranking of megacities with the highest growth rates for luxury real estate and predicts growth at the level of 13.5%.
Experts advise paying attention to projects both in Dubai and in the capital of the UAE, Abu Dhabi. Prices there are still lower than in Dubai, but the city is being actively built up, developing and attracting investors and expats.