UAE Property Portal
phone Call Us On +44 208 305 7879
email Email

Dubai property ‘too expensive’ to get Iran sanctions bounce

Dubai homes are 4.4 times more expensive for Iranians using local currency than they were five years ago, meaning a lifting of sanctions against the nation would have little short-term effect on the emirate’s slumping real estate market, according to Phidar Advisory.

“This is simply a matter of economics,” Phidar managing director Jesse Downs said by phone on Monday. “The rial will take time to appreciate and until that happens, Dubai property will be very expensive for Iranian buyers.”

Iranians have been among the largest buyers of homes in Dubai after Indians, Pakistanis and Britons, fuelling speculation that lifting the sanctions would release a flood of investment in Dubai real estate. Home prices in the emirate of Dubai were down more than 12 per cent in the third quarter from a year earlier as a stronger dirham deterred Europeans and a slump in oil prices hurt economies across the GCC.

As Iran’s second-biggest trade partner since 2009, the UAE is well-positioned to help Iran increase its consumption of foreign goods, Phidar Advisory said in a report. However, sanctions relief would leave Iran less dependent on the UAE than it is now.

Sanctions against Iran probably will be lifted within the first three months of 2016, after the International Atomic Energy Agency has confirmed the nation has curtailed its nuclear work, diplomats said last month.

If inflation in Iran is controlled, the country may retain capital and attract investment from abroad, Mr Downs said. If not, cash will pour out of the country, but much of that will bypass emerging markets. Iranian investors would gain access to the US and Europe where yields are higher compared with Dubai and volatility and geopolitical risk are lower, according to the report.

Comments ( 0 )

Post a Comment

Submit Your Comment