In the first quarter of this year, the share of Russian buyers of real estate in Dubai increased by 67%, according to Dubai-based housing market analysis companies. This is attributed to Western sanctions that have deprived wealthy Russians of the opportunity to do business in many other countries.

According to the real estate company Betterhomes, in the ranking of the most active investors in the Dubai real estate market, Russia has risen from 7th to 5th place, behind only the UK, India, Italy and Canada.

According to market analysts, soon Russia may rise even higher, and possibly top the list. This will happen as the effects of delayed sanctions begin to show.

Among the Russians who have made acquisitions not given, a number of well-known names in Russia, in particular, businessman Roman Abramovich, say sources in Dubai.

According to Virtuzone, a company that helps foreign companies settle in Dubai, since the beginning of the war in Ukraine, requests for their services from Russians have increased fivefold.

“They fear the coming economic crisis and are moving here to secure their wealth,” says George Hojidge, CEO of Virtuzone.

According to Betterhomes CEO Ryan Mahoney, clients from Russia choose to buy real estate in the most prestigious areas of Dubai, in luxury residential complexes, usually overlooking the Persian Gulf.

Russians spent nearly $12 billion in Dubai in the first three months of 2022, according to brokers. Also during this period, a record deal of $76.2 million for the house was recorded.

By comparison, one of the most expensive properties ever purchased by a Russian in London cost £34m (over $42m).

This house in the prestigious area of Knightsbridge, along with other possessions of Russians in Britain, is currently put up for exchange by the owner.

Barred from selling property abroad by personal sanctions or banking restrictions, many wealthy Russians are offering barter deals to third-country real estate agencies, such as swapping a house in London for a house in Dubai, Dubai brokers say.

This scheme is now being actively considered by residents of the UAE who are interested in purchasing housing in London, but its novelty and lack of development at this stage scare many away.

“I’m very skeptical, I’m not sure it’s a viable scheme, there are too many documents to be submitted in London,” a Dubai businessman who asked to remain anonymous, who reviewed the exchange offer, told the Financial Times. “But it shows how far they [the Russians ] ready to go to bypass the financial system.”

According to lawyers, such a barter is possible only if its Russian owner is not under sanctions.

At the same time, many realtors also note a sharp increase in the volume of cash transactions since the beginning of the year. Given that the Russian Central Bank has banned the withdrawal of amounts exceeding $10,000 from the country, the capital of Russians buying property in Dubai is clearly not in Russia.

The Russian presence in the Dubai real estate market has been noticeable before, but in the last couple of years, demand has increased very tangibly, says Mahoney.

The real estate market makes up one third of Dubai’s economy. The constant demand for housing, especially rented, is provided by numerous expats – employees of international companies that are firmly established in Dubai.

With the onset of the pandemic and the mass exodus of foreigners to their countries, this market has noticeably shaken, so the United Arab Emirates as a whole and Dubai as one of the emirates welcome Russian clients with great enthusiasm.

The UAE has taken a neutral position in the conflict between Russia and Ukraine. According to the authorities, the services of all the country’s institutions, primarily financial ones, are equally provided to Russians and Ukrainians who fled the war and its consequences.

“We’ve seen an influx of Russian clients since the start of the war in Ukraine, which has prompted us to create a dedicated Russian department to serve them,” said Michael Kortbavi, partner at BSA law firm Ahmad Bin Hezeem & Associates.

Also, according to him, due to the closure of large international law firms in Moscow, a pool of talented lawyers has formed for hire.

The UAE Central Bank urges banks to be cautious in dealing with Russian clients due to “increased risks associated with sanctions and restrictive measures imposed by other countries.” However, there is no real caution.

Banks and other service industries are so preoccupied with the influx of large Russian capital that Russians with more modest means are suffering: they experience delays in paperwork, red tape with opening accounts in UAE banks and mediocre service in the real estate market at a more modest price. categories.