With Israel and the United Arab Emirates (UAE) normalizing their diplomatic relations last year, Tel Aviv-businessmen and women across both countries are keen to find bargains in the UAE’s highly-rewarding property market.
Ms. Vasilevsky-Pinto, who lived in Israel and Qatar, has made multiple sales in less than three months. She said that “the market right now in Dubai is extraordinary” because of its low prices and favorable payment terms.
Ms. Vasilevsky-Pinto’s story provides some solace to a property market in the UAE that is in desperate need of relief, as a glut of newbuilds and a coronavirus-related exodus of thousands of expats is holding prices near their lowest levels since late 2012.
Real estate isn’t the only new business opportunity. The two countries have agreed to cooperate on agri-technology and countering COVID -19, as well as develop weapons together. As cooperation strengthens, Israel expects bilateral trade to hit $6.5 billion. Besides, the UAE has developed a $10 billion investment fund in Israel aimed at strategic sectors.
Meanwhile, the chamber of commerce in Dubai estimates that annual exports to Israel would exceed $4 billion, making it one of the emirate’s most important trading partners.
However, the move may be the most welcomed in Dubai’s property sector, which is expected to reach $130 billion by 2023. According to Swiss multinational investment bank UBS Group AG, Dubai residential prices have fallen nearly 40 percent in inflation-adjusted terms since 2014. The departure of 8.4 percent of the population as a result of the COVID-19 outbreak is likely to place pressure on Dubai real-estate companies’ profitability.
To meet demand, Emirati property development company Damac and its competitor Emaar Properties PJSC have started looking for Hebrew-speakers, posting job openings on the internet for candidates with the required language skills. Advertisements for Dubai properties have also appeared on Israeli websites, which was unimaginable only a few years ago.
Israeli investors are becoming more prominent, which may help to reverse recent trends. Although the slowdown has pushed Dubai prices to a “new cyclical low,” Tel Aviv’s asking prices have risen due to easy funding and a scarcity of supply. In its annual Real Estate Bubble Index, UBS ranks Dubai assets only above “undervalued.” It considers Tel Aviv to be “overvalued.”
Mr. Daniel Goldstein Director of the Tel Aviv office of Beauchamp Estates pointed out “Israelis do like exotic places and they do chase yield, and the yields in Dubai or the emirates generally are much higher than you achieve anywhere in Israel.”