Dubai property now 28% more affordable for Russian investors
As the ruble stabilised in 2016, interest in real estate denominated in dollar-pegged currencies has risen among Russians, with Dubai often the top choice.
Summary:
- Real estate in Dubai became 28% more affordable for Russian buyers in 2016
- As the ruble strengthened against the dollar, there was a significant uplift in interest for international property denominated in dollar-pegged currencies
- Dubai remains “a very much appreciated overseas property investment destination” for Russian investors, at a time when the city is tipped to be at the start of a new growth curve
Russian investors are currently on the hunt for more international property investment – and Dubai is right at the top of their wish list.
Last year the ruble stabilised and strengthened. At the end of January 2016 it dropped to its worst exchange rate against the US dollar (82.9:1) for 18 years. That low point, however, marked the start of a period of stability and growth. Now the exchange is around 60 rubles to 1 US dollar.
While this is good news for Russian-based investors with interests in the US, it’s also positive for any investor dealing in currencies pegged to the US-dollar.
And with real estate often the safe-haven asset Russians prefer when looking to invest overseas, property denominated in these currencies has got 28% cheaper over the last 12 months.
This impact is already being felt in Dubai, the city a recent survey from Tranio.com found to be the most popular among Russian property investors. Last January traffic to Emirati portal PropertyTrader.ae from online property searchers in Russia accounted for just 6% of overall traffic. By July 2016 this rose to 17%, almost three times the volume, performance that the portal’s Sales Director Umer Ali described as “a significant upward trend”.
Dubai can offer Russian buyers the level of luxury that’s highly sought after but, crucially, at a much lower cost in comparison to many other global cities.
“Apart from the many advantages of Dubai, the variety of elite property for comparatively low prices are strong attraction points,” according to Yulia Kozhevnikova, a real estate research expert at Tranio.com.
This renewed level of interest comes at a crucial time for Dubai’s property market. After a period of correction, the likes of CBRE and Knight Frank believe 2017 will see the city begin a new period of growth, triggered by preparations to host Expo 2020 and the economic impact the global event will have on Dubai.
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