Investor Guide · Russia
Investing in Dubai from Russia
Why Russia invests in Dubai
Alongside Brits and Indians, Russians have been pioneers of Dubai property investment.
Since the early days of the Gold Rush, investors from Russia have sought the quality of life and investment returns that Dubai real estate afforded.
Now, given the difficulties domestically and Dubai's status as the top-performing prime real estate market in the world once again, capital is flowing from Russia to Dubai at record rates.
Russia’s real estate market is experiencing significant disruption following the end of the government’s mortgage subsidy programme.
Investors had seen this keep rates at 8% since 2020. This programmed stability, aimed at stimulating the economy amidst sanctions, contributed to a boom in the real estate and construction sectors, maintaining employment and boosting economic growth. However, it also fueled rising inflation, which peaked at over 9.1% in July 2024.
In July 2024, the Russian government terminated the mortgage subsidy, causing borrowing costs to soar as the Russian Central Bank’s prime rate climbed to 19%. The end of the subsidy led to a sharp reduction in new mortgage issuances and a significant increase in rental prices, creating a perfect storm for housing affordability. Construction companies have tried to mitigate the impact by offering flexible subsidy schemes, but these carry risks if interest rates do not fall in the future.
What to know before investing
The abrupt end of the mortgage subsidy programme has laid bare deep imbalances in Russia’s real estate market. Despite initial efforts to soften the blow with alternative subsidies, the market faces challenges, including rising rental costs and reduced housing affordability - and investors are looking at Dubai with more appetite than ever before.
The Russian Central Bank’s shift from growth-support policies to combating high inflation suggests a challenging medium-term outlook, with expected declines in both economic growth and consumption in 2025.
Since the 2022 conflict in Ukraine, Russian nationals have significantly increased their investment in Dubai's real estate market. Recent figures show that Russian investors have purchased USD 6.3 billion worth of properties in Dubai, both existing and in-development over the last few years.
This influx has highlighted Dubai as a prime destination for elite Russians seeking to diversify and mitigate the financial impacts of the Ukraine conflict. This conservative estimate includes USD 2.4 billion in existing properties and USD 3.9 billion in off-plan projects.
The significant inflow of Russian capital has positively impacted Dubai's property market, driving demand and contributing to its resilience and growth. The strategic location, favourable economic policies, and high-quality lifestyle offerings make Dubai a desirable destination for international investors and the Russian influx has underscored the appeal.
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