by admin
Russian and French investors are flocking to Dubai’s residential real estate market. High mortgage rates in Russia and long payback periods in France drive this trend. The real estate market in Dubai is emerging as a prime destination due to its attractive returns and safer investment environment.
Russian Buyers Seek Relief from Skyrocketing Mortgage Rates
Russian investors in Dubai are returning in significant numbers. The end of Russia’s 8% preferential mortgage rate and rising housing prices have pushed many investors to look elsewhere. Mortgage rates in Moscow have surged to 18%, making property investments unattractive.
According to Olga Poletskaya, head of the investment department at Colife Invest, it’s nearly impossible to generate a return of 18% from rental income in Russia. This situation is pushing Russian investors to explore more viable markets like Dubai. She emphasized that Moscow’s soaring housing prices have doubled recently, further discouraging investors. The surge in mortgage payments has led to a 42% decline in property demand in Moscow since July 2024.
Dubai’s Real Estate: A Global Magnet
Dubai residential market is gaining popularity among international investors from Russia, France, and other countries. In an uncertain global economy, the city’s real estate market is a secure and profitable option. Experts say Dubai offers a unique mix of prestige, safety, and high returns on property investments.
The value of residential properties in Dubai has steadily increased, making it an appealing option for investors. Rental yields and property appreciation make Dubai a more lucrative market than domestic possibilities in many countries.
French Investors Drawn by Shorter Payback Periods
French investors are also gravitating toward Dubai’s luxury real estate market. The shorter payback period for properties in Dubai, nearly half that of Paris, has made the Emirate a desirable investment destination. Paris’ real estate market not only has more extended payback periods but is also weighed down by high taxes. In contrast, Dubai offers a tax-free investment environment.
Neighborhoods like Dubai Marina, Downtown, Dubai Creek Harbour, and Business Bay are highly desirable for cash-rich French buyers. These areas offer world-class infrastructure, excellent living conditions, and accessibility to the city’s major destinations.
Surge in Property Prices in Moscow
The price per square meter residential property in Moscow has doubled over the past four years. In 2020, the average cost was around $800 per square meter, but by mid-2024, it had risen to $1,600. This price increase has also increased the initial payment required to purchase property. The old scheme of buying property with an 8% mortgage and covering payments with rental income has collapsed.
With no viable alternatives in the Russian market, investors are now focusing on Dubai. Poletskaya pointed out that investors and regular homebuyers in Moscow have been hit hard by removing the preferential mortgage rate.
Turkey and Other Alternatives for Russian Investors
In addition to Dubai, Turkish cities like Istanbul are popular among Russian investors. However, Dubai is preferred due to its superior rental yields and investment opportunities. The ease of business in the UAE and its advanced infrastructure make it a more appealing option.
Growing Demand for Luxury Properties in Dubai
French and Russian investors are increasingly focusing on luxury properties in Dubai. Areas like Dubai Hills, Jumeirah Lake Towers (JLT), and Downtown are prevalent. These neighborhoods offer modern amenities, scenic views, and high tenant demand. Investors are drawn to these areas because of the potential for high investment returns.
Real estate experts confirm that the Dubai rental market is booming, with demand for premium properties outstripping supply in many areas. This high tenant demand ensures that investors can generate significant rental income while benefiting from property appreciation.
Dubai’s Real Estate Market: A Safe Investment Haven
For investors, Dubai offers more than just good returns. The city’s political stability, robust legal framework, and world-class infrastructure make it a safe investment destination. In uncertain times, international buyers see Dubai as a haven where their investments can grow securely. Additionally, the Emirate’s lack of property taxes and other financial incentives make it an attractive option for wealthy investors worldwide.
In Contrast..!
Dubai’s residential real estate market continues to draw high-net-worth individuals from Russia and France. The combination of skyrocketing mortgage rates in Russia and long payback periods in Paris has pushed investors to seek more profitable opportunities. With its stable political environment, high rental yields, and tax-free investment structure, Dubai is the top choice for those looking to diversify their property portfolios. Russian and French investors are capitalizing on Dubai’s growth, making it one of the hottest property markets in the world.
