Dubai: Dirham drop helps British, European, Indian property investors save millions

Dubai’s booming real estate market has become even more attractive to foreign investors, as the UAE dirham has weakened against major international currencies such as the British pound, euro, and Indian rupee.

This currency shift has significantly reduced property acquisition costs for buyers from the UK, Europe, and India — potentially saving them millions of dirhams compared to earlier this year.

According to John Lyons, managing director at Espace Real Estate, the depreciation of the US dollar, to which the UAE dirham is pegged, has played a key role in making Dubai real estate more affordable for international buyers.

“In simple terms, for many international investors — especially from Europe and the UK — Dubai property has just become significantly more affordable,” Lyons explained.

“We recently listed a Dh59-million villa in Palm Jumeirah. Back in January, a British buyer would have needed just over £13.2 million to purchase it. Today, that same villa would cost around £12 million — a saving of more than £1.18 million (Dh5.86 million) purely due to exchange rate differences, without any reduction in the asking price.”

Stronger currencies drive investment

Since January 2025, the British pound has strengthened from 4.47 to nearly 5 against the dirham, while the euro has risen from 3.76 to 4.22. This appreciation means investors can get more dirhams for their home currency, increasing their purchasing power in the Dubai market.

“The euro has appreciated nearly 10 per cent against the dirham since the start of the year. A Dh1-million property that would have cost around €265,800 in January now costs approximately €239,200 — saving the buyer €26,600 (about Dh111,500) without any change in the local price. British investors have also benefited, though the pound’s movement has been more modest,” said Farooq Syed, CEO of Springfield Properties.

Syed noted that the strengthened foreign currencies are fuelling renewed buying momentum in Dubai, particularly in the prime and upper mid-market segments, where transaction volumes have recently surged.

Selling in UK to buy in Dubai

The favourable currency environment is even prompting some UK residents to sell their properties back home to invest in Dubai instead.

“There’s a clear uptick in cross-border activity from regions where currency appreciation has enhanced purchasing power — particularly from the UK, eurozone, India, and Pakistan,” Syed said. “Interest from Russian buyers also remains consistent. These investors are focusing on well-connected communities, branded residences, and ready-to-move-in units.”

Lyons added that his firm has seen a rise in UK buyers since January, with a shift in behaviour.

“We’re seeing more clients who initially planned to buy in Dubai while continuing to lease their homes in the UK now deciding to sell their UK properties outright,” he said. “This shift is driven by two key factors: an improved UK property market and the fact that British buyers now get nearly nine per cent more value when purchasing in Dubai due to the stronger pound.

“Real estate markets don’t adjust overnight, but the currency gap is real. Historically, property prices tend to catch up. Since January 2025, the US dollar – and by extension, the dirham – has dropped by just under nine per cent against both the euro and the pound. That might sound abstract, but the impact on buyer behavior is very real,” he added.