James has lived in Dubai for 30 years and has never seen the local property market so frenetic. On a clear day, from his office in Boulevard Plaza, a stone’s throw from the Burj Khalifa, he can see the Palm Jumeirah, a man-made archipelago in the shape of a palm tree lined with luxury villas. There, in the past year, homes have sold for more than Dh300mn ($82mn).
“Across Dubai, you’re hearing about homes changing hands for crazy money,” the tax adviser tells me over the phone. “The Russians have been doing this for the past year: bidding each other up for the big trophy homes.”
For decades, rich and powerful Russian buyers have transformed luxury property markets across Europe. Such was their penchant for the stucco-fronted town houses of the UK capital — and for the relative lack of scrutiny from certain estate agents and lawyers into their sources of funds — the city earned the nickname “Londongrad”.
But since Vladimir Putin’s invasion of Ukraine, international sanctions, closed-off investment visa programmes and bans by many western companies on dealing with Russian clients, those taking money out of the country have been looking elsewhere.
“The main destinations are the UAE and Turkey — which haven’t imposed sanctions — and Cyprus,” says Veronika Konečná, head of the Russia and CEE section of corporate intelligence company Aperio. “The ultra-rich favour Dubai,” she adds.
Super-yachts belonging to sanctioned Russian billionaires including Andrei Skoch, steel tycoon Alexander Abramov and “nickel king” Vladimir Potanin have all been docked at the Mina Rashid marina, near the mouth of the Dubai Creek, according to reporting by the Whale Hunting newsletter.
Last March, sanctioned Russian oligarch Roman Abramovich was spotted house-hunting on the Palm Jumeirah.
“What Russian oligarchs are looking for now is secrecy and anonymity beyond the reach of international sanctions,” says Matthew Page, of the Carnegie Endowment for International Peace, a Washington think-tank.
Boosted by purchases from rich Russians, Dubai’s property market has boomed. George Azar, chief executive of estate agent Luxhabitat Sotheby’s Dubai, says that in the past year he has sold between $600mn and $1bn worth of homes to Russians or those from ex-Commonwealth of Independent States countries — all of them for more than $5mn. By value, the group accounts for a third of all his company’s business.
“Dubai isn’t their first choice,” he says. “They always preferred London, Monaco or Paris because they wanted to be part of Europe, and they like the greenery. But since the war, they just don’t feel they are welcome.”
Last year, 219 homes in Dubai sold for more than $10mn, more than twice the number of the year before — and more than the total bought in the decade prior to that. Knight Frank and Savills continue to broker property transactions in Dubai to Russians, but insist not with those subject to sanctions.
According to Knight Frank research, the price of Dubai’s most expensive homes — those located across Emirates Hills, Palm Jumeirah and Jumeirah Bay Island — increased 44 per cent last year, more than any other of the 100 markets tracked by the agency. Rents increased 25 per cent over the period.
The gains follow a period of decline in the local property market. Between the peak in 2014 and its lowest point in 2020, the price of a Dubai villa fell 32 per cent, according to Knight Frank; between 2015 and 2020 villa rents fell 31 per cent.
In the 2010s, photos emerged of vehicles parked at Dubai’s airport covered in dust, seemingly abandoned by debt-ridden residents. Today supercars can be seen at the airports once more — but, this time, many are arriving from Russia.
“Airline freight companies have been transporting them in large numbers for Russian customers, typically via Poland,” says a person connected to the airline industry in Dubai who asked to remain anonymous. “Since the start of the war, [super-rich] Russians are just hauling as much of their assets as they can into Dubai.”
The appeal of Dubai to sanctioned Russians will not surprise many that have followed the emirate’s recent history. Last March, UAE was added to the “grey list” of countries with deficient anti-money laundering or terrorist financing regulations by the Financial Action Task Force (FATF).
“For Russian sanctioned individuals or criminals, your money is safe there in a bank earning interest or in property, your yacht is safe in a berth,” says Page.
“There has always been a quid pro quo,” says James, who is originally from the UK and who declined to give his real name. “The authorities won’t look too closely at where your money has come from as long as you spend it here.”
But the attraction of Dubai is much broader than its status as an oligarch playground. Local estate agency Betterhomes — whose average sale price is around $600,000 — recorded a 220 per cent increase in purchases by Russians last year.
“Dubai has always been popular with Russians but, undoubtedly, there has been an increase in the past year coming on a permanent basis for a home and to move their family,” says Richard Waind, Betterhomes’ managing director. “Dubai is seen as a safe haven to move both capital and people,” he says.
Since the invasion of Ukraine, the safety offered by Dubai — and Turkey, and other countries recording an uptick of Russian arrivals — has taken on a new significance, as thousands of ordinary Russians seek to avoid conscription or to escape the country’s increasingly authoritarian regime, or both.
When the war broke out, Sasha (not his real name) had been considering leaving Moscow for several years. Putin’s tightening of power and the steady erosion of civil liberties and press freedoms made life increasingly uncomfortable. “You would go to the cinema to see an art house movie and you realised that half of it had been cut by censors as LGBTQ propaganda,” says Sasha, who now lives in Tel Aviv.
But he loved Moscow and was enjoying the freedoms of being a young, successful worker for a tech company. “It’s the greatest city in the world. And it really works. The public transport system is great; the restaurants and services are fantastic. You can buy a car in the middle of the night,” he says.
The war was the last straw, he says. The fear of prison kept him from protesting, and he watched alarmed as the conflict divided the city starkly between those in support and those against. “Military symbols, like the Z, [were] everywhere, slogans on stickers in car windows. It felt so bad — like a journey back to the second world war,” he says.
“I was making good money but I decided I couldn’t be part of this. And the easiest way was to come to Israel,” he says. A few days after the invasion he left to begin Aliyah, the process of Israeli naturalisation available to all Jews, benefiting from a government payment scheme for arriving Russians, Belarusians and Ukrainians launched in April.
Since the invasion of Ukraine, 20,500 of Russia’s estimated 165,000 Jews have left, according to The Jewish Agency, which helps Jews around the world move to Israel (all but two of the 40 on Sasha’s programme, which he asked not to be mentioned by name, are Russian).
Despite learning Hebrew since he arrived, he still struggles with the grasp required for day-to-day life. But the Moscow he left has changed beyond recognition, he says — of his 10 close friends, seven have now left Russia — and he has no plans to return.
Estimates suggest up to 1mn Russians have left the country since the invasion of Ukraine.
According to data from Russian property portal Prian.ru reported in the Russian press, requests from Russians to buy real estate abroad in 2022 doubled compared with 2021, with three-quarters of these associated with permanent moves, up from 55 per cent the year before.
Cyprus has been a popular choice, favoured for its golden visa scheme, which the EU requested be scrapped last March amid concerns sanctioned Russians were relocating there to live and work. Since the start of the war, Pavlos Loizou, of Ask WIRE, which compiles a local property index, estimates that about 6,000 Russians and Belarusians have arrived in Cyprus, alongside a larger number of Ukrainian refugees — as of February, 16,000 remain, according to local media reports.
The latest influx has driven up rents and reduced the supply of homes in Limassol, the coastal city that has attracted Russian buyers thanks to its glamorous marina and new luxury developments. “The vast majority [of Russians] arriving are young professionals [aged] between 30 and 40 who rent,” says Loizou, who estimates that only 300 have bought. In the last three months of 2022, apartment rents in the city were 23 per cent higher than in the same period in 2021, according to Ask WIRE.
In Turkey, where homes bought for more than the equivalent of $400,000 grant the buyer and their immediate family the right to Turkish nationality, Russian nationals bought one in four homes sold to foreigners last year, according to the Turkish Statistical Institute — a total of 16,312 homes, up from 8,035 a year earlier.
In October, finance graduate Viktor moved from Moscow to join his parents at their retirement home in the Turkish resort city of Antalya, which they bought two years ago. “I don’t want to fight in a conflict that feels like something out of the Middle Ages or live in a city where young people are grabbed on the underground or stopped in their car and forced to enlist,” says Viktor, which is not his real name.
Number of homes in Dubai that sold for more than $10mn last year, more than twice the number of the year before
He had intended to visit them for a holiday, but he’d been stopped at the Russian border and told to report to a conscription site — he’d heard that people were being bullied into signing up at such places. Fearing the borders might close, the next day he locked up the flat he owns in Moscow and passed into Belarus before boarding a flight to Turkey. A few days later, when chatting on the Telegram messaging app favoured in Russia, he learnt others had subsequently been stopped taking this route.
The area has a thriving expat scene, Viktor says, particularly around Mahmutlar, known locally as “little Russia”, a neighbourhood outside Alanya, with droves of thirtysomethings like him who have left Russia, many of whom have become friends. But he is applying for jobs in finance in Europe and the US and he is missing city life.
“I’m exploring the healthy way of life out here, hiking, swimming, jogging — and there are a lot of Russian men my age. We all face the same problems: we are tired of the war but can’t return to our lives back home.”
Anya, 34, moved to Zurich in August, transferring her job to the European headquarters of the US multinational she works for, one of a steady trickle of such transfers since the start of the war, she says.
Her mother shares many of her fears about Russia, but has remained in St Petersburg, in part to be close to Anya’s grandmother, who is in her eighties. But Anya has no plans to return to Moscow, choosing a local pay and accommodation package in Zurich and placing her six-year-old twin girls in a local school.
“I wasn’t moving as an expat, because I don’t see myself going back,” she tells me. “The girls miss their father [they are divorced, he is in Russia] and grandparents, but they know and understand the reasons for our move.”
Back in London, some worry that measures to crack down on the flow of Russian oligarch money into the property market have stalled.
Bion Behdin, co-founder of First AML, which does customer due diligence checks for estate agencies, says sanctioned Russian individuals are still trying to buy and sell homes in the UK. “Since the middle of last year, they have targeted smaller agencies, often many at the same time, which have less sophisticated controls and customer onboarding processes,” he says.
“Self-regulation by professional bodies is not a substitute for clear rules and laws,” says Page. “The UK is still too slow and inconsistent in weaning itself off its addiction to Russian dirty money.”