According to the Arabian Bussiness news; As geopolitical tensions rise, Dubai’s luxury real estate attracts significant capital inflows from Russian and Chinese investors seeking a financial safe haven. Growing investor demand from Russia and China has helped fuel exponential market growth in the UAE, especially in Dubai’s luxury real estate segment, industry insiders told Arabian Business. As geopolitical tensions and economic uncertainties persist at home, wealthy individuals from these two countries have turned to Dubai in increasing numbers, chasing high yields and a safe haven for their capital. “Dubai and Abu Dhabi have consistently attracted the highest levels of investment this year,” notes Adil Akhtar, CEO and founder of Foremen Fiefdom Real Estate. “Particularly noteworthy is the remarkable surge in the luxury real estate sector.”
According to Sergei Rakov, Head of Technology at real estate firm Allsopp & Allsopp, Russians and Chinese investors have been especially active buyers of Dubai property, with transaction volumes increasing significantly since last year. This influx has driven strong price appreciation in Dubai’s luxury segments. Al Barrari saw property deals at its investment locations increase 400 percent, with its clientele coming primarily from ultra-wealthy buyers. The surging demand is reflected in transaction volumes as well. According to Akhtar, the off-plan residential sector in Abu Dhabi and Dubai witnessed year-to-date increases of 94.1 percent and 43.3 percent, respectively. When it comes to high-end property, both the Chinese and Russian communities have established a formidable presence. However, Russians initially dominated sales earlier in 2022, following the conflict with Ukraine. “Chinese investment reached a historical peak of 13 to 14 percent of total sales, dropping to 4 percent in 2022 but rising to 8 percent this year,” Akhtar notes. Popular investment hotspots include Dubai Marina, Palm Jumeirah and Jumeirah Beach Residences for Russians. Their Chinese counterparts favour locations like Jumeirah Golf Estates, Downtown Dubai and The Springs, according to Allsopp & Allsopp. Russians boost Dubai short-term rental demand Russians have increasingly turned to short-term rentals as well. “The surge in Russian tourists seeking short-term rentals in Dubai commenced even before the onset of the pandemic. From my professional experience, dating back to October 2019, it became evident that a substantial portion, approximately 80 percent, of our clientele, hailed from Russia – based on my previous company,” said Sheena Arilla, Head of Short-term lettings at Allsopp & Allsopp. “Their preference for Dubai as a travel destination stemmed from the region’s favourable climate and numerous attractions.” In 2022, the pronounced demand for short-term rentals was primarily attributed to Russian tourists. Aside from the demand brought on by the FIFA World Cup during Q4 last year, this rise in bookings by Russian visitors was mainly due to the ongoing geopolitical tensions with Ukraine. “In the past year, approximately 45 percent of our bookings were attributed to Russian tourists, and this trend appears to persist, as evidenced by our current bookings,” Arilla added.
Chinese investors increasingly eyeing Dubai property market Chinese investors are increasingly eyeing Dubai’s booming property market, according to data from Asia-Pacific-based proptech firm Juwai IQI. Chinese real estate investment activity in the UAE has grown significantly since 2019, data supplied to Arabian Business by Juwai IQI showed. By June 2022, the top destinations for Chinese cross-border home buyers included Australia, Canada, the United Kingdom, United States, Thailand, Malaysia, Japan, United Arab Emirates, Vietnam and Singapore, respectively. “United Arab Emirates has quickly climbed up the list of top nations for Chinese homebuyers. The UAE and Japan are the only destinations in the top 10 that aren’t either Anglo or Southeast Asian. After ranking 13th in 2021, the UAE entered the top 10 for the first time in 2022 at ninth and this year placed eighth,” Kashif Ansari, Juwai IQI’s Co-founder and Group CEO, told Arabian Business. Ansari added that the surge in demand started with Chinese professionals who used Dubai “as a home base” during the pandemic, where rentals were inexpensive, the city was open and it was easier to travel to Europe or visit the US, giving Chinese residents a wide range of travel and lifestyle options that were not available in China at the time. Three years on since the pandemic, he expects Chinese buyer transaction value to continue to increase this year. “The trend will gather steam and sustain itself through 2025 at least.” So far this year, developers have told Juwai IQI that almost 20 percent of their sales have already been made to Chinese buyers. “In the past, most Chinese buyers were purchasing investments. Often, these apartments were smaller than one bedrooms or studios. Just as in other countries, now we are seeing more Chinese buyers interested in purchasing homes to live in. They’re looking for two-bedroom or three-bedroom apartments or villas,” he added. “Some will use their apartments as second homes, but others are moving full-time to Dubai. They have been unable to travel for three years, and there is a lot of pent-up demand.” In addition, news of the upcoming launch of the casino resort in Ras Al Khaimah has instigated greater investor interest in cities beyond just Dubai and Abu Dhabi. Before 2023, Juwai IQI saw almost no buyer enquiries for the emirate. “Casino projects have successfully attracted Chinese buyers in several countries, so Wynn Al Marjan Island has an advantage there,” said Ansari. “Ras Al Khaimah is already being seen as the ‘new Dubai’ and is getting the attention of Chinese buyers who believe prices will appreciate more quickly than in Dubai.”
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