Wealthy Russian buyers are fueling UAE real estate boom

16 August 2023 Consultancy-me.com 2 min. read

Russian buyers are expected to continue fueling the real estate boom in the UAE in the short term, with more purchases and more expensive properties than other buyers.

With rent prices soaring in the UAE, locals and expatriates alike are increasingly looking towards buying property, which also doubles as a sound investment.

Russians have been following that trend, with 72% of Russian expatriates in the UAE reporting that they bought property within the last year. That is according to a market research survey conducted by consulting firm Redseer.

Wealthy Russian buyers are fueling UAE real estate boom

“Russian expats are increasingly settling in the UAE due to its stable economy and politics, making it a safe haven for high-net-worth individuals seeking refuge from conflict-exposed regions,” said Akshay Jayaprakasan, an Associate Partner at Redseer.

The Russian invasion of Ukraine has resulted in Russian citizens being bombarded with sanctions from most Western countries. Since economic obstacles have made things more difficult, oligarchs and other wealthy Russians have been looking for anywhere that might still be open for business.

While short term growth will continue to come from Russian expats, long term growth will be carried by local buyers, according to the report. Along with rising rent costs, government deregulation and more affordable properties will all contribute to long-term growth in the real estate market.

Russian buyers were far keener on villa-style properties than apartments, with 67% of Russian expat respondents saying they purchased a villa, versus only 30% of other buyers that bought this more luxurious option. The survey also showed that 64% of Russians were buying a second property, while other nationalities were overwhelmingly buying a primary property.

This data helps characterise the type of client the average Russian in UAE is: wealthy and looking to invest large sums of money. In fact, Russian expats spent a whopping 98% more on real estate purchases than other buyers.

Wealthy Russian buyers are fueling UAE real estate boom

The report also noted a trend of social media advertising of real estate properties and the effectiveness of agents that share not just listings, but also investment information, market trends, and exclusive deals.

The UAE has the largest expatriate population in the world. Emiratis themselves are only around 10% of the population in the UAE, with significant groups of other nationalities from around the world – particularly South Asians – making up the rest.

The U.S. Treasury Department has expressed concern over the UAE (and other countries like Turkey) allowing Russian oligarchs to stash money in expensive assets, something they see as sanctions evasion in some cases. The UAE and other Gulf states are among a handful of countries that have refused to enforce Western sanctions on Russian banks and citizens.