Wealthy Russian buyers boost real estate market in UAE

Russian buyers are expected to continue to fuel the real estate boom in the UAE in the near future by purchasing more and more expensive properties than other buyers. With rental prices rising in the UAE, locals and foreigners alike are increasingly turning their attention to buying real estate, which is also a solid investment opportunity.

Russians are following this trend as 72% of Russian expatriates to the UAE report having purchased real estate within the last year. This is evidenced by a market study conducted by consulting firm Redseer. "Russian expatriates are increasingly taking up permanent residency in the UAE due to its stable economy and political environment, making it a haven for high-net-worth individuals seeking refuge in conflict-ridden regions," said Akshay Jayaprakashan, partner at Redseer.

As a result of Russia's invasion of Ukraine, Russian citizens have been sanctioned by most Western countries. Due to economic obstacles, oligarchs and other wealthy Russians have started looking for places where it is still possible to do business. While short-term growth will continue thanks to Russian emigrants, long-term growth will be driven by local buyers, the report indicates.

In addition to rising rental values, government deregulation and affordable real estate prices are also contributing to long-term growth in the real estate market. Russian buyers are much more interested in a villa than in an apartment: 67% of Russian emigrant respondents purchased a villa, while only 30% of other buyers chose this more luxurious option.

These data help define the typical Russian customer in the UAE: a wealthy individual looking to invest large sums of money. In fact, Russian emigrants spent 98% more on real estate purchases than other buyers. The report also notes the trend towards real estate advertising on social media and the effectiveness of agents sharing not only property listings but also information on investments, market trends and exclusive offers.

OAE has the largest expat population in the world. Emiratis themselves make up only about 10% of the UAE's population, with the rest of the significant group consisting of other nationalities from around the world, especially South Asia. The U.S. Treasury Department has expressed concern that the UAE (and other countries such as Turkey) are allowing Russian oligarchs to hide money in expensive assets, which they consider in some cases to be sanctions evasion. The UAE and other Gulf states are among the few countries that refuse to enforce Western sanctions on Russian banks and citizens.