UAE Real Estate Market: Purchasing Power Rankings - The Impact of Exchange Rate Fluctuations on Investor Sentiment

Introduction

The real estate market in the UAE (United Arab Emirates), including Dubai, is attracting attention from investors worldwide. However, a recent survey, published on September 22, 2025, revealed significant disparities in "purchasing power" among investors depending on their country of origin. This article, based on the "Foreign Buyer Power Index" released by Stamn Real Estate Development, will clearly explain which countries' investors possess the strongest purchasing power and the underlying factors from an expert perspective.

Ranking of Foreign Investor Purchasing Power in the UAE Real Estate Market

According to the index, investors from the UK, the US, and Kuwait possess the strongest purchasing power when acquiring property in the UAE. Other Middle Eastern and Western European countries' investors also feature in the top 10.

Top 10 Countries by Purchasing Power

1. United Kingdom
2. United States
3. Kuwait
4. Saudi Arabia
5. Qatar
6. France
7. Germany
8. Netherlands
9. Canada
10. Australia

This ranking is calculated based on a comprehensive evaluation of multiple factors, including exchange rates, affordability relative to their home country, wealth, average income, and freedom of capital movement.

Significant Impact of Exchange Rates on Purchasing Power

A particularly notable aspect of this ranking is the direct impact of exchange rate fluctuations on investors' purchasing power.

Advantage for UK and European Investors

The primary reason for UK investors topping the list is the significant appreciation of the British Pound against the UAE Dirham. While it was 4.47 Dirhams per Pound in January 2025, it surpassed 5 Dirhams by September of the same year, marking a 14-year high. This stronger Pound allows UK investors to purchase UAE property under more favorable conditions than before.

Similarly, the Euro has also appreciated against the UAE Dirham (from 3.76 in January 2025 to 4.35 in September), creating a tailwind for European investors.

Challenges Faced by Indian and Pakistani Investors

Conversely, Indian and Pakistani investors, who have traditionally been major buyers in the Dubai real estate market, are facing challenges due to their weakening domestic currencies.

• India: The Indian Rupee hit an all-time low against the UAE Dirham, reaching 24 Rupees per Dirham. This currency depreciation significantly reduced purchasing power, placing India at 18th in the ranking.
• Pakistan: While the Pakistani Rupee's exchange rate has been relatively stable, high domestic inflation has weakened real purchasing power, resulting in a ranking of 22nd.

Continued Investment Despite Reduced Purchasing Power

Interestingly, despite the depreciation of the Indian Rupee, real estate investment by wealthy Indians and Indian expatriates residing in the UAE remains active. This is likely due to the expectation of continued growth in the UAE market and a desire for asset diversification, leading them to judge that the investment is worthwhile despite unfavorable exchange rates.

Zheng Jian, CEO of Stamn, noted, "Regions like Dubai Islands attract high interest from European investors drawn to island living and its investment potential as 'the next Palm Jumeirah,' while emerging areas like Jumeirah Garden City see astute buyers from Russia and CIS countries seeking affordable family properties," pointing out that demand trends vary depending on the investor's country of origin.

Summary

These survey results clearly demonstrate how crucial exchange rate trends are when considering real estate investment in the UAE. While UK and European investors benefit from stronger currencies and increased purchasing power, investors from countries facing currency depreciation, such as India, Pakistan, and Japan, are exposed to headwinds with relatively reduced purchasing power.

However, due to the attractiveness of the growing UAE market and for asset diversification, it is not uncommon for investors to decide that the investment is worthwhile even when facing unfavorable exchange rates.

Investment motives are diverse, influenced by each country's economic situation and individual asset backgrounds, and the UAE real estate market will undoubtedly continue to be an attractive destination for investors worldwide.

Reference Article

https://www.khaleejtimes.com/business/property/uae-property-weak-rupee-purchasing-power