Russians are the top buyers of properties from Dubai’s biggest developer, a sign that demand from investors seeking safe havens remains strong more than a year after Moscow’s invasion of Ukraine.
(Bloomberg) — Russians are the top buyers of properties from Dubai’s biggest developer, a sign that demand from investors seeking safe havens remains strong more than a year after Moscow’s invasion of Ukraine.
Emaar Properties PJSC didn’t provide the exact percentage of Russian buyers in a first-half investor presentation, but showed them as the largest segment of the market in a pie chart. Their appetite for property in the emirate have helped to push prices to record levels.
Sara Boutros, an analyst at CI Capital, estimates that Russians accounted for about 12% of buyers in Emaar developments this year, compared with second place in 2022 and ninth in 2020. Emaar has the biggest share of Dubai’s property market with around 30% of all home sales ahead of construction and acts as a proxy for the city’s wider real estate sector.
“We expect Russian flows to remain strong for the rest of the year,” she said. “That’s mainly due to the attractiveness of the luxury segment in Dubai where rental yields are very high and investment costs are low.”
Residential rental yields in the city ranged from 6.75% to 7.25% in the second quarter, according to real estate adviser CBRE Group Inc. Dubai doesn’t impose rental income tax or capital gains tax, and government fees for buying a property is 4%, lower than in many other markets.
Dubai’s property market has been booming, bucking the trend in many parts of the world, where home values have dropped amid surging interest rates and a darkening growth outlook. The recovery, which capped seven years of price declines, started after the pandemic and was fueled by an influx of newcomers — from crypto millionaires and bankers relocating from Asia to wealthy Russians seeking to shield assets.
Russians also topped the list of non-native buyers in Turkey last year, purchasing about a quarter of all homes sold to foreigners.
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Emaar Development PJSC sold 6,264 properties in the first half with sales reaching 19 billion dirhams ($5.2 billion), according to the presentation. Last year, Emaar sold 30.7 billion dirhams of properties, the highest since 2015.
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