According to a real estate agency, the mean cost of properties purchased by Russians in Dubai within the previous year was $1 million, with some individuals acquiring up to ten units at this price point. Since the commencement of the Russia-Ukraine conflict, there has been widespread coverage of Russian citizens leaving their homeland, with conjecture suggesting that sanctions have driven them towards the Middle East, particularly Dubai, rather than Europe or the United States.

A significant exodus of Russians was particularly noticeable during the onset of the war and again when the announcement of mobilizing 300,000 reservists was made in September. However, the question remains as to how the reported influx of Russians in Dubai has influenced the city's economy, specifically in the real estate market.

• The real estate market in Dubai has had an exceptional year of sales in 2022.
• Metropolitan Premium Properties reported a 130% increase in sales, totaling AED 11 billion ($2.995 billion).
• Better Homes LLC saw a surge in deals, with a 200% increase in sales during the first two months of 2023 compared to the same period in 2022.
• Significant demand from Russian investors was observed in the first half of 2022.
• Positive sentiment around the government's handling of the pandemic has contributed to the boom in Dubai's real estate market.
• Increased access to residency for investors is another factor that has contributed to the recent boom.
• Post-Expo 2020 and FIFA World Cup momentum have also played a role in boosting Dubai's real estate market.
• Elias Hannoush, Managing Director of Morgan's International Realty, highlights the positive impact of these factors.

However, the Russia-Ukraine war has also had a positive impact, prompting European individuals and companies to consider the emirate as a permanent location due to economic uncertainty. While Russian investors are not the sole driving force behind the surge in sales, they have spent an average of $1 million per property, with some purchasing up to 10 units at that price point.

The investors range from those fleeing economic uncertainty to wealthy VVIPs looking for a safe haven for their money or to relocate. Additionally, some investors have made profits by purchasing and then "flipping" properties due to skyrocketing prices in Dubai. The influx of Russian nationals into Dubai has brought with it numerous opportunities for growth, particularly in the real estate market. While Russian buyers have played a significant role in boosting sales, other factors such as positive government handling of the pandemic, increased residency access for investors, and post-Expo 2020 and FIFA World Cup momentum have also contributed to the recent boom.

The younger generation of Russian social media influencers, tech startup founders, and blockchain and cryptocurrency firm employees are also moving to the city to cater to growing demand. Metropolitan Premium Properties, which originally catered to the off-plan market for CIS citizens, has seen increased demand from other countries, including India, the US, and countries in Europe. High net-worth individuals, entrepreneurs, institutional investors, and family property funds are driving demand for luxury properties worth over UAE dirhams 20 million, and more than 75% of those buying properties are relocating permanently to Dubai. While geopolitical factors can impact the market, the overall confidence in the Dubai real-estate sector is the primary reason behind its success.
 

According to Richard Waind, Group Managing Director of Better Homes LLC, Dubai's real estate market has seen a global increase in demand over the past 18 months, with momentum continuing into 2023. He believes that if Dubai can continue to attract new residents and grow as it has been doing, there is no reason why the market couldn't enjoy several years of growth. Waind notes that Dubai's real estate prices are still relatively low compared to other world cities.

Waind also suggests that the market has not yet reached its peak and that there will be continued international demand based on "push factors" such as the war in Ukraine, rising taxes, natural disasters, and the cost-of-living crisis. Off-plan properties offering a hedge against higher interest rates, as well as luxury homes, are likely to be prominent. Additionally, rising rental prices will lead residents seeking more stability to consider buying, leading to increased domestic sales demand.

Furthermore, businesses and individuals, including real estate agents, must comply with anti-money laundering regulations that apply to all nationalities. Russian nationals are subject to know-your-customer (KYC) regulations and compliance measures that have been in place since before the war. Real-estate brokers must check the names of prospective buyers against two lists, the UAE local terrorists list, and the UN Security Council Consolidated List, and report any suspicious transactions via the GoAML portal.

In conclusion, the Dubai real estate market has experienced a surge in demand from Russian buyers, especially in the luxury sector, due to various factors such as geopolitical tensions, tax hikes, and natural disasters in their home country. However, like all other nationalities, Russian buyers and real estate agents must comply with anti-money laundering regulations and know-your-customer (KYC) regulations. Despite this, experts predict that the market is still growing and has not yet reached its peak, with increasing demand from both international and domestic buyers. Off-plan properties and luxury homes are likely to be popular choices, and the market could enjoy a number of years of growth if Dubai continues to attract new residents and investors.