It is now common to see Russian and French buyers investing in Dubai real estate market due to high mortgage rate in Russia thereby making property investment domestically a herculean task. The recent cancellation of the 8% preferential mortgage rate in Russia moreover the hike in housing interest rates by 18% is forcing the Russian buyers to look for better options abroad and the most preferred location being Dubai.
Olga Poletskaya, the head of investment at Colife Invest noted that Russian investors are focusing their attention to Dubai since housing is becoming too expensive in their home market, which has seen property prices double in the last four years. This means, the rates of mortgages available to property owners in Russia are high, meaning that the only feasible way to rent out properties is at a rate that would be enough to pay for the mortgage. Therefore, Russian buyers are now turning to Dubai wherein the returns on investments in real estate are high, the place being safe and prestigious.
French investors, who are also interested in Dubai’s competitive and profitable real estate sector, are particularly investing in exclusive residential districts. The absence of taxes and a significantly more rapid ROI compared with Paris have made Dubai most attractive.” Mr. Alam said that due to high taxes and long payback periods in France, many wealthy customers are shifting to the UAE, where the properties at areas such as Dubai Marina, JLT, and Downtown are much in demand.
These locations have good connectivity, proximity to major cities, and have high absorption by tenants; hence more economically appealing to investors. Therefore, as Dubai targets more international property buyers, it solidifies its position as one of the leading international real estate markets.
