Wanted: Hebrew-Speakers for the Arab World’s Glitziest City
As soon as Israel and the United Arab Emirates normalized diplomatic relations last year, Miri Vasilevsky-Pinto saw an opportunity.
Judging that Israelis would start seeking bargains in the UAE’s struggling property market, the Tel Aviv-based businesswoman began setting up a company that would cater to exactly that customer base. Less than three months later, Vasilevsky-Pinto, who has lived in Israel and Qatar, has notched up several sales.
“The market right now in Dubai is extraordinary” because of its low prices and favorable payment terms, she said in an interview. Her next project, she said, is to start offering tours to the emirate for would-be investors.
Vasilevsky-Pinto’s story offers a thread of comfort for a UAE property market in need of deliverance as a surplus of newbuilds and the coronavirus-triggered exodus of thousands of expatriates keep prices near the lowest since late 2012. The arrival of Israelis in a country that boasts one of the Arab world’s most iconic cities may also give the UAE a fresh edge versus its Gulf competitors, albeit one that remains contentious in a region where most nations don’t recognize the Jewish-majority state.
The new-found seam of business isn’t limited to real estate. The two nations have agreed to collaborate on agri-technology and combating Covid-19, and have even partnered to develop weaponry. Israel predicts bilateral trade could reach $6.5 billion as cooperation matures. The UAE has also established a $10 billion investment fund aimed at strategic sectors in Israel.
Nor is the trade all one way. Dubai’s chamber of commerce expects annual exports to Israel alone to top $4 billion, making it one of the emirate’s biggest trade partners.
But it’s in the Dubai property sector -- one estimated to top $130 billion by 2023 -- that the change may be most welcome. Dubai residential prices have dropped almost 40% from their 2014 levels in inflation-adjusted terms, according to UBS Group AG. And S&P Global Ratings warned this month that the departure of some 8.4% of the population following the Covid-19 outbreak is likely to keep profitability at Dubai real-estate companies under pressure.
Yet with about 130,000 Israelis visiting the UAE since the normalization of relations in September, the spike in interest has been palpable, real-estate companies say. Israelis will be looking to buy or rent ahead of Dubai’s World Expo 2020, set to be held in October, said Niall McLoughlin, a senior vice president at Damac Properties PJSC, among the emirate’s leading developers.
To meet the demand, Damac and its rival Emaar Properties PJSC have even begun looking to hire Hebrew-speakers, posting job vacancies on-line for candidates with the requisite language skills. Unimaginable a few years ago, advertisements have also popped up on Israeli websites marketing Dubai properties.
“I had no clue that in the Middle East, outside of Tel Aviv, there were things like this,” said Shay Cohen, an Israeli who visited the UAE twice before buying a $250,000 two-bedroom apartment in Dubai’s Town Square district. “I was in shock” when I found out.
The growing presence of Israeli investors may help reverse recent trends. While the slowdown has brought Dubai prices to what UBS called a “new cyclical low,” easy financing and a dearth of supply have driven up asking prices in Tel Aviv. UBS rates Dubai properties as just above “undervalued” in its annual Real Estate Bubble Index. It rates Tel Aviv as “overvalued.”
“Israelis do like exotic places and they do chase yield, and the yields in Dubai or in the emirates generally are much higher than you achieve anywhere in Israel,” said Daniel Goldstein, the director of the Tel Aviv office of Beauchamp Estates, a multinational real-estate company.
All of which will be a comfort to Vasilevsky-Pinto.
“It’s going well but you know we’re at this phase where it’s a completely new market and until recently it was a complete taboo, so right now it’s about breaking barriers,” she said.
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