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Property is Booming in “Sanctions-Free” Dubai, as Russian Interest Soars

Property is Booming in “Sanctions-Free” Dubai, as Russian Interest Soars

Emirati property magnate Hussain Sajwani is on a high following a record start to the year for Dubai's property market.

"Dubai is doing very well," said the veteran real estate developer on Wednesday. "How Dubai handled COVID was a key factor in the market's current boom."

According to real estate firm Savills, Dubai will see $35 billion in property market transactions in 2021, the most since the global financial crisis. According to a separate CBRE report, total transaction volumes are now at the highest level ever recorded for the first two months of this year.

According to Sajwani, the UAE, which has long been a popular destination for Russian wealth and tourism, will benefit as Russians seek refuge and a safe haven for their fortunes amid the ongoing conflict in Ukraine and unprecedented Western sanctions.

He said, "I'm sure a lot of Russians are trying to fix their problems and issues," he said, "but Dubai will benefit in the end from any crisis. It comes after the UAE, which is strengthening ties with Russia, decided not to match Western sanctions imposed on Russia for its invasion of Ukraine.

To be honest, these sanctions made a lot of people nervous, "Sajwani said. "If anyone brings money here legally and professionally through the banking system, we'll do business with them."

According to TRM Labs, cryptocurrency will not be able to assist Russia in evading sanctions.

According to a recent Reuters report, Russians were among the top purchasers of real estate prior to the war and sanctions, and they were buying property in Dubai and even using cryptocurrency to get their money into the Gulf state.

According to experts, the country's property market has also been a common channel for money laundering, where individuals avoiding sanctions or seeking to park illicitly obtained wealth have been able to funnel their cash.

The UAE was placed on a financial crime watchdog's "gray list" earlier this month due to concerns that the Gulf country is not doing enough to combat illegal financial activities. Concerns about money laundering and illicit financial flows prompted the Group of Seven economies to establish the Financial Action Task Force, which placed the UAE on a watchlist alongside Turkey, Jordan, Pakistan, and others.

In response to the designation, the UAE stated that it takes its role in safeguarding financial integrity "extremely seriously" and that it will "work closely with the FATF to quickly remedy the areas of improvement identified."

Covid Response Key

In response to the designation, the UAE stated that it takes its role in safeguarding financial integrity "extremely seriously" and that it will "work closely with the FATF to quickly remedy the areas of improvement identified."

Progress on the Iran nuclear deal, according to Sajwani, would also be a boon. "If the Iranian-American peace treaty, the nuclear treaty, happens and takes place," he said, "it will be a huge benefit for Dubai." "The region will see much more stability and peace," he added.

Last year, Dubai's property market reversed multiple years of price declines as the city avoided lockdowns, increased vaccinations, and enacted new policies to attract tourists and residents while the rest of the world was shut down by the pandemic.

The long-awaited Dubai Expo 2020, which was postponed for a year due to the pandemic, also drew attention, as the multi-billion-dollar project aims to become a new residential and commercial complex after the event concludes in April. However, whether Expo will become the new thriving city within a city that its developers envision remains to be seen.

"Dubai's residential market has been the poster child for the rebound in real estate demand in 2021," according to Savills. "The city's residential market not only outperformed its previous activity levels, but it was also among the best-performing markets in the world."

Source: CNBC

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