Dubai – AFP: Dubai is witnessing a real estate boom since the end of the Covid epidemic, fueled by the influx of investors, especially Russians, into the Gulf emirate, which negatively affects a number of residents, as it causes a significant increase in rents.
Dubai, known for its skyscrapers, ultra-safe luxury residences and artificial islands, recorded record results in 2022 in terms of real estate deals, with a total value of $143 billion, an increase of more than 76% compared to the previous year.
In some luxurious neighborhoods in the city, where real estate is sold for more than ten million dollars, the number of sales last year exceeded all sales in the period between 2010-2020, according to the British company “Knight Frank”, which specializes in real estate consulting.
Faisal Durrani, head of Middle East research at Knight Frank, says prices in these neighborhoods jumped 44%, marking “the strongest luxury market growth in the world.”
Dubai attracts investors because of its advanced infrastructure, business-friendly environment, tax policy, and the availability of various services provided by hundreds of thousands of workers, most of whom come from Asia.
The position of the United Arab Emirates calling for ending the war on Ukraine without criticizing Russia attracted a large number of wealthy Russians fleeing the sanctions imposed on their country.
While the authorities do not publish data by nationality, Dubai’s leading real estate agency Better Homes says Russians were the top international buyers last year, and third among residents. The British, Indians, French and Italians are also among the main investors in the emirate.
Entrepreneurs, employees and celebrities are seeking to find a place to settle in Dubai, especially after the restrictions imposed to contain the Covid pandemic have been eased.
“We have a lot of customers from Europe who want to move here (..) and establish companies or find work,” says Farhad Azizi, CEO of Azizi Group, which is developing real estate and is preparing to build the second tallest tower in Dubai after the famous Burj Khalifa. .
The UAE has a population of about ten million, of whom foreigners constitute about 90 percent. For them, the real estate boom is not a good thing.
Jacob Fletcher, a specialist in the rental market at Better Homes, believes that this situation is “great for landlords, but not good for tenants,” as rents have increased by 20% this year.
According to Fletcher, newcomers will have to settle for smaller housing and further from the city centre, but long-term residents are the most vulnerable to the fallout from rising real estate prices.
Dubai residents have long been accustomed to rising rental prices and then decreasing them according to market fluctuations, ups and downs in the past, especially after the 2009 financial crisis or during the Covid pandemic.
The rapid rise in rents in recent months, which came in a global context of inflation and rising prices, has left its impact on many families in Dubai.
“The owner of the house told us that he had to leave a year ago because he wanted to sell the house,” says a Western resident who has been living in Dubai for five years with her husband and son.
“But the market is very crazy these days, the price is exorbitant, and we have to pay more for a smaller house in a further area,” added the woman, who asked not to be named.
On social networks, many share stories of their conflict with homeowners who are seeking to take advantage of the current price hike ahead of a possible new change in the situation.
And Fabasal Durrani stresses that Dubai is “not immune” from the current global risks, including the global economic slowdown and high interest rates.
He added, “The UAE, like Saudi Arabia, will be among the fastest growing economies (..), and inflation levels are lower than in the rest of the world,” explaining that “the positive aspects are more than the negative ones.”
