Any short-term recovery for Dubai’s real estate market needs to see Iranian investors getting back into the action. And the property market could be the first beneficiary of the full rollback of sanctions against Iran, according to a new UAE realty outlook put out by Cluttons, the consultancy.
Here’s why: In 2010, Iranian buyers made up 12 per cent of transactional volumes in Dubai property, placing them fourth behind Indians, UK citizens and Pakistani nationals. By the first quarter of 2015, Iranians’ share of buying had dropped to 3 per cent, based on official records, as the sanctions took a big chunk of their ability to commit investments outside of their own market.
“For the real estate landscape, the return of an Iranian variable to the national real estate equation will be particularly momentous,” the Cluttons report notes. “It is our view that Iranian nationals will seize the opportunity to make significant real estate investments in Dubai.”
Iranian fund flows can also prove a bulwark against another ongoing concern for the local economy and of its real estate.
“Any weakening in regional demand for Dubai residential assets as a result of continuing oil price declines is expected to be countered to an extent by Iranian funds, which are waiting in the wings,” the report notes.