- Dubai recorded more than 11,000 real-estate transactions in January and February, a record for the city.
- Dubai is seeing a spike in demand from Russian and Ukrainian buyers, agents told Insider.
- Off-plan properties — projects that have yet to be constructed — are getting snapped up within days of being listed.
Dubai’s real-estate market is off to a roaring start to the year.
The city recorded 11,071 transactions in January and February, the highest it has ever recorded in the first two months of the year, according to a CBRE report.
The record follows a strong 2021: The total value of residential transactions in Dubai last year hit $35 billion — the highest the city has recorded since the global financial crisis — per a report from Savills.
Insider spoke to three Dubai-based real-estate agents to get an inside look at what’s happening with the market right now.
Surging demand for luxury off-plan properties
Demand for off-plan properties — projects that have yet to be constructed — has been robust, Thomas Fawcett, the cofounder of Dubai-based luxury real-estate firm The Property, told Insider. Projects due to be completed in 2024 and 2025 are selling out in a day, Fawcett said.
Fawcett said demand has been particularly high for the luxury housing developments at Emaar Beachfront, which has a private beach, and Peninsula by Select Group, which is by the Dubai Canal.
In March, The Financial Action Task Force (FATF), an International money-laundering watchdog, put the UAE on its “gray list.” In response, the UAE’s Executive Office of Anti-Money Laundering and Countering the Financing of Terrorism said the country is committed to fighting financial crime and said it “will work closely with the FATF to quickly remedy the areas of improvement identified.”
Despite its designation, Dubai’s property market remains popular with investors.
“The massive opportunity for investors is finding a good off-plan project and looking ahead, two to three, four years time, looking at where the market trajectory is going be, and then hopefully making the capital appreciation on these purchases that they are making today,” Fawcett said.
With working from home being the norm, Fawcett has said he’s seeing increased interest in larger residences in Dubai. The values of villas in Dubai has risen nearly 22% since the start of the pandemic, per a Knight Frank report.
While Dubai’s luxury real-estate market has long been popular with Russian investors, the war in Ukraine has further boosted Russian demand. “We’re receiving requests every day from Russia,” said Fawcett.
“It’s increased, obviously, with the uncertainty of Russia and what’s going on,” He added. “People don’t know what’s going to happen to their money.”
Unlike the West, the UAE has not levied sanctions against Russia. While it remains one of the few places in the world where Russian money is welcomed, with the tumbling ruble and sanctions kicking in, the difficulty now lies in completing the transaction.
“They want to buy, but they literally cannot deliver the payment,” Fawcett said of Russians looking to make real-estate investments in Dubai.
Conflict accelerated Ukrainian buyers’ decision to purchase
Russia’s invasion of Ukraine has also driven up demand from Ukrainians looking to flee the war, Driven Properties partner Khadija Otmani told Insider. These are people, she said, who were already considering making property purchases before the invasion started.
“They’ve been thinking about it since a very long time ago. And instead of taking their time, it just accelerated what they were already about to purchase,” said Otmani, who primarily deals with properties that are above 5 million euros ($5.49 million), specializing in penthouses and villas.
Earlier this month, the UAE scrapped and then reinstated a policy granting Ukrainians visa-free entry into the country, CNBC reported.
The pandemic has also been a factor: In July 2020, Dubai became one of the first cities to reopen internationally as many other countries kept their borders closed. The demographics of the city’s luxury real-estate investors shifted as confidence in the government’s COVID-19 management soared, Otmani told Insider.
Previously, the bulk of her clients were either local, from Gulf countries like Saudi Arabia and Kuwait, or from India. As the pandemic progressed, Otmani noticed an uptick in demand from clients in Europe and other parts of Asia, including people who had never previously shown interest in Dubai.
Completing purchases without setting foot in Dubai
Across the globe, the process of buying real estate has gone virtual. This includes not just payments or the signing of contracts, but livestreams of house viewings as well — and Dubai is no exception.
“A lot of my clients, they’re not actually here,” said Nate Dania, the founder and CEO of Plan B Advisory, which oversees residency solutions and prime property investments. He has been working in real estate since 2007.
“We’ve seen a big shift in terms of clients who buy remotely, especially for off-plan projects because there’s not really anything to see. Maybe sometimes there’s a show apartment, but mostly it’s sold on concept and paper,” he added.
Such deals can be closed after a
call, a livestream tour of the show apartment if it exists, and little else, Dania told Insider. Developments he’s closed virtually include Six Senses Residences by Select Group and One Palm by Omniyat, both of which are located on the Palm Jumeirah.
“There was a client who’s based in Los Angeles, which is pretty far off. And we did everything remotely. So I sent them all the information for the Six Senses Residences and then they really liked it,” Dania said.
“It was about $6 million,” he added.