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‘Second wave’ of wealthy Europeans moving to UAE

European expat UAE Isco/Unsplash
An influx of Europeans first moved to the region around eight years ago, and this second wave is probably down to general instability at home
  • Rich expats worried about political and economic situations at home
  • UAE will welcome highest number of millionaires this year
  • Surge has contributed to booming real estate, but also to inflation

An influx of wealthy Europeans are investing in and moving to the UAE as they face economic and political uncertainty at home, according to leading industry experts.

“We’re seeing a new wave of wealthy entrepreneurs moving here,” Dubai-based Arnaud Leclercq, partner holding privé and head of new markets at Lombard Odier, told AGBI.

Leclercq said a stream of Europeans moved to the region around eight years ago, and that now there is a “second wave, probably due to certain instability in Europe in general”. 

He said that this was especially the case with the UK because of recent political unpredictability, “which doesn’t bring confidence over the longer term”, as well as a concern about tax rises.

A Henley Global Citizens report published in August forecast that the UAE will record the largest net inflow of millionaires on record, adding an additional 4,000 high net worth individuals this year, overtaking traditional havens such as the US and UK.

Russia topped the list of countries expected to see a net outflow of millionaires in 2022. It is followed by China, India, Hong Kong, Ukraine, Brazil, the UK, Mexico, Saudi Arabia and Indonesia.

This trend has been evident in the record-breaking Dubai real estate sector. Figures from property consultancy Betterhomes found that in the first half of this year the volume of residential transactions rose 60 percent. 

India was the biggest source, followed by the UK, Italy, Russia and France. The number of buyers from France and the UK rose 42 percent and 18 percent respectively, the data showed.

The increase of wealthy expats investing in and moving to the UAE comes as the Organisation for Economic Co-operation and Development this week released its growth rates for the key G20 countries and found that the UK was the second weakest performer after Russia, with the British economy predicted to contract by 0.4 percent in 2023.

Germany was third worst (contracting 0.3 percent), with Italy set to shrink by 0.2 percent. France is forecast to grow by 0.6 percent and Spain by 1.3 percent.

The only Gulf state on the list was Saudi Arabia, which is projected to grow 5 percent in the next year.

“The UK finds itself in the same position as many other European economies with high energy-driven consumer inflation and large post-pandemic government debt,” Geneva-based Stéphane Monier, chief investment officer at Lombard Odier Private Bank, said in an online blog in late October.

“However, its choice to leave the European Union is having slow but far-reaching effects, and in recent weeks a fiscal experiment in unfunded tax cuts unravelled confidence in the government’s ability to manage the economy,” he added.

The shift in focus towards the UAE was echoed in an exclusive interview earlier this month with British billionaire property tycoon Nick Candy.

“I think Dubai is a great place to invest. It will be where I have one of my global homes. I absolutely love it. And if crime continues to get worse in the UK, I’d be happy to leave. I don’t want to, but if I had to then I would,” Candy told AGBI.

“When I was growing up, the world’s top cities were London, New York and Hong Kong. Today they are Dubai, London, Singapore, New York and Miami. It’s like we are having a generational change.”

Earlier this summer, Josef Stadler, executive vice chairman of UBS Global Wealth Management, who manages some of the bank’s wealthiest clients, predicted that investments in the Middle East by ultra high net worth family offices will increase by at least 50 percent over the next decade.

However, the rush of affluent migrants into the UAE has had some negative consequences, contributing to the country’s rising inflation, according to a senior industry banking official.

Khatija Haque, chief economist and head of research at Emirates NBD, said in October that it had “absolutely contributed to the robustness of demand and the recovery that we’ve seen in domestic demand over the past year or so.”

But she added: “I think it has contributed to inflation in housing. In particular, we’ve seen the rents going up much faster than we were expecting coming out of the pandemic.”

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