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Russians become biggest buyers of Dubai property as sanctions drive oligarchs out of Europe

dubai property - Michel Suesse / EyeEm
dubai property - Michel Suesse / EyeEm

Russians have become the biggest foreign buyers of property in Dubai after the desert oasis became a refuge for wealthy oligarchs fleeing sanctions.

In the wake of the Ukraine war, many super-rich Russians flocked to the United Arab Emirates (UAE) after they faced asset seizures in other cities such as New York, London and Paris.

The UAE has refused to follow the western sanctions regime imposed on Russians with links to the Kremlin after Vladimir Putin's invasion of Ukraine, making it essentially a safe haven.

Roman Abramovich, the former owner of Chelsea football club who was sanctioned for his links to Mr Putin, was reported to be house hunting along Dubai’s Palm Jumeirah, a group of artificial islands designed to look like a palm tree.

The interest in Dubai resulted in a huge surge in relocations last year, with property broker Betterhomes reporting that Russians are now the biggest group of non-resident buyers.

In 2022, they accounted for 15pc of transactions at the firm, ahead of Britons at 12pc, Indians with 11pc, Italians 7pc and French 4pc.

Dubai registered more than 86,000 residential sales transactions overall last year, surpassing a previous record of 80,000 in 2009, according to the firm.

About 208 billion dirhams (£46bn) worth of property was sold last year, an almost 80pc gain compared to 2021. Prices rose 11pc.

The influx of foreign buyers has helped the property market in Dubai to buck a trend seen in many other countries, where rising interest rates and fears of economic recession have sent values falling.

The real estate sector accounts for about a third of the economy in Dubai, one of seven sheikhdoms that make up the United Arab Emirates.

Richard Waind, group managing director of Betterhomes, said rising interest rates had slowed price rises in Dubai but underlying demand was still strong.

“We're obviously less exposed to interest rates here through the prevalence of cash purchases, he told Reuters.

“In the UK, US, cash purchases are somewhere between 20 and 40pc of all transactions. Over here, it's roughly 70pc.”