Rameez Ansari talks about a financial phenomenon of Pakistanis among top property buyers in Dubai
It is known since long that bulk of Pakistanis among top property buyers in Dubai money is shifted out of the country and invested abroad. Apart from Europe and America the favourite destination for Pakistanis to invest their money is Dubai. Dubai has established itself as a commercial and business hub in the Gulf Region despite not having the facility of possessing oil money. The most prominent part of Dubai is its property market that has surged in the first half of the year as investors piled in, with Russians among the top five buyers as the emirate benefits from an influx of wealth in the wake of Western sanctions. The property boom witnessed the transaction volume of residential shoot up 60 per cent with an 85 per cent rise in the value of properties sold that is undoubtedly a very high escalation in price index.
Top investors from many countries bought properties in Dubai including the UK, India, Italy, Russia and France, Canada, the United Arab Emirates, Pakistan and Egypt, Lebanon and China. In the order of listing the Russians are found to be the top-most buyers and Pakistanis also figure in as the tenth largest buyers in Dubai property market. It is reported that there was witnessed an extraordinary surge in the number of Russian buyers that is listed at 164 per cent in the first half of this year from the first half of 2021. The numbers for France and Britain rose 42 per cent and 18 per cent respectively, while those from India fell 8 per cent and Italy dropped 17 per cent. In this context, it is pointed out that demand for property was boosted by geopolitical instability in Europe and mortgage buyers looking to get in ahead of well-telegraphed interest rate hikes. Russians were pouring money into Dubai properties, seeking a financial haven in the wake of Western sanctions on Moscow over its invasion of Ukraine.
The property boom has been reflected in the records mentioning that in the first half of the year, a record 37,762 units were soldwith residential property market transactions totaling nearly $24.23 billion. Dubai’s property market began recovering from 2020’s severe downturn early last year with buyers snapping up luxury units after the emirate eased pandemic restrictions faster than most cities around the world. However, Dubai’s real estate recovery revealed that it was fragile and uneven and an oversupply of residential properties would pressure prices in the long run. Luxury property transactions were up 87 per cent compared with the first half of last year, with apartments making up 62 per cent of all transactions. Investors dominated sales, making up 68 per cent of all buyers, up 10 per cent compared to a year earlier.
Earlier Dubai’s property market was described as powering out of a six-year malaise as lockdown dodgers and wealthy international investors drive a buying frenzy that is breaking records and fueling an economic recovery. Luxury villas are the hottest segment in the market, with European buyers, in particular, seeking homes on Dubai’s signature Palm Jumeirah man-made island, as well as golf course estates. Dubai’s rollercoaster property market, which had been in steady decline since 2014, went into flatline after Covid-19 hit last year and the emirate slammed shut its borders. The Gulf emirate became one of the first destinations to reopen to visitors last July, pairing the open-door policy with strict rules on masking and social distancing, and an energetic vaccination program which has produced some of the highest inoculation rates globally. Despite a surge in coronavirus cases in the new year after holidaymakers descended en-masse, life has continued largely as normal with restaurants and hotels open, and few of the restrictions that have blighted life elsewhere.
After years of torpor when homeowners watched their equity drain away, the surge in luxury properties above 10 million dirhams has been striking, with 90 transactions in April compared to around 350-400 on a regular yearly basis. A mansion on the Palm has sold for 111.25 million dirhams, the highest price reached in years in the precinct which features 16 fronds lined with show-stopping houses and supercars parked in the driveways.The highest-priced property now available on the block is a vast Italian-inspired modern villa positioned at the end of one of the fronds, complete with 180-degree beach frontage, which is being offered for 100m dirhams.
After it languished on the market during the gloomy days at the height of the pandemic, the developers are hoping that one of the new breed of cashed-up Europeans will be tempted by the infinity pool, private cinema, and acres of marble and glass. In a market where many fortunes have been made and lost, there is nervousness about whether the recent giddy rises can be sustained. Sales of properties above 10m dirhams rose 6.7 per cent in April compared to the previous month, and 81 villas were sold on the Palm in April alone compared to 54 in all of 2020. TW