DUBAI: The expatriate capital of Dubai is undergoing a housing boom fueled by wealthy expatriates, which has benefited investors and burdened tenants. Rents are rising rapidly, and properties are selling quickly.
In 2022, the influx of wealthy investors, particularly from Russia, was largely to blame for the record number of real estate transactions in Dubai, which is known for its towering skyscrapers and ultra-luxury villas.
According to the most recent official figures, that contributed to the Gulf city state's raking in more than $140 billion in revenue last year, representing a 76% annual increase in property market transactions.
According to Betterhomes broker Jacob Fletcher, "the market in the last year has massively changed -- it is great for landlords, but it is not so good for tenants."
Dubai attracts expatriates with tax incentives, a lavish lifestyle, and low-cost services provided by low-wage laborers from Asia, Africa, and the Middle East, despite its lack of oil wealth.
According to Knight Frank, a real estate consultancy, there were "more sales than the total recorded between 2010 and 2020" in upscale Dubai neighborhoods where properties sell for more than $10 million in 2022.
According to the report, property prices in these desirable areas increased by 44% in 2022 compared to the previous year.
Knight Frank's head of Middle East research, Faisal Durrani, stated, "The luxury market in Dubai was the fastest growing market in the world but remains cheaper than main big cities."
A financial crisis caused the property market in Dubai to plummet more than a decade ago.
Now, the city attracts extremely wealthy investors, including Russians fleeing sanctions following their nation's invasion of Ukraine.
Betterhomes reports that Russians made up the majority of foreign purchasers of Dubai's real estate market last year.
According to the brokerage firm, French, British, Indian, and Italian nationals are also among the top investors.
One of the first cities to open after the Covid-19 pandemic has a diverse clientele that includes celebrities, business executives, bankers, and entrepreneurs.
Farhad Azizi, CEO of Azizi Developments, stated, "We're seeing a lot of customers from Europe, who are wanting to move here and want to send their kids to school here, start business here."
As a result, "they've kept the market very busy" and "we were seeing a lot of new clientele."
The majority of Dubai's 3.5 million residents are foreign nationals.
However, they now pay more to live in the city because of the housing boom.
Betterhomes' Fletcher stated, "There's about a 20% increase in the rental market this year compared to last year alone."
"The people who have lived here for a particularly long time are extremely dissatisfied with how high the prices have gone,"
About a third of Dubai's economy is accounted for by the real estate industry.
The city's residents are accustomed to property market volatility due to saw prices falling during the pandemic and the financial crisis of 2009.
The rapid rise in rental prices over the past few months has alarmed many in light of global inflation.
The market is out of control. A Western expat who has lived in Dubai with her husband and son for five years complained, "It's so expensive."
The landlord's decision to sell the apartment forces the family to relocate.
The market is extremely diverse. Therefore, we will have to pay for something smaller and further out," she told AFP under oath.
Tenants who are unhappy with their landlords and are fighting over rent prices are all over social media.
What are our options? The expatriate stated, "We have to move, so we have to take the hit."