The number of wealthy investors and expats in the UAE will grow, as the country is excluded from the FATF grey list

The number of wealthy investors and expats in the UAE will grow, as the country is excluded from the FATF grey list

The recent UAE’s removal from the FATF grey list is a highly significant event that will have a major impact on the growth of the country's real estate industry. The welcome FATF decision is expected to increase the influx of capital into the country, particularly for high net worth individuals (HNWI), by reducing unnecessary checks and restrictions on investors.

HNWI is having a huge impact on the UAE’s economy and property market. Real estate sales above $10 million doubled in 2023 alone. Over $7.6 billion was raised from all such transactions made during the period. The UAE also ranked second in the world in 2023 in attracting foreign HNWIs to the national economy. We saw a 17% annual increase in property sales in the country as early as January 2024.

The UAE was on the FATF list, the international anti-money laundering organization, in March 2022. This happened amid the Russian-Ukrainian conflict and the sanctions imposed on Russia. The country is a neutral party in the conflict and, having long been popular with wealthy Russians, has become one of the key destinations for Russian investors and expats. The local market has experienced a large influx of Russian money.

The country’s removal from the FATF grey list should attract more overseas direct investment in the long run. Experts are confident in the positive impact of this decision on increasing demand for real estate assets in the country. In addition, de-listing can not only simplify money transactions, but also reduce transaction fees. All this is happening, while the UAE is projected to experience a 5% macroeconomic growth this year, and property investments are expected to yield returns between 5% and 10%.

Although Dubai remains the country’s leading property market, the demand for housing in Abu Dhabi is growing as well. For example, off-plan real estate sales increased by 99% year-on-year last year, and their total value grew by 174%. Analysts anticipate increased activity in off-plan real estate markets within 3-5 years, as the UAE’s population grows. The local market is expected to expand as a result of stabilization of interest rates and increased availability of long-term visas.

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