Reopened borders, the housing crisis, and the slump in the economy are encouraging Chinese investors to purchase homes abroad.
According to real estate brokers and analysts, Chinese investors, who were seen in Dubai in 2018 visiting model homes, are returning in greater numbers this year.
According to experts, Chinese investors are coming back to Dubai’s real estate market in greater numbers.
Following the Covid epidemic, China reopened its borders, and the country’s property crisis has led investors to look for safe havens for their money around the world.
According to Emaar Properties, the largest real estate developer in Dubai, Chinese investments in its projects approximately doubled to account for 7% of total sales in the first half of 2023 from between 3% and 4% in the same time a year earlier.
Chinese investors are returning to the Dubai real estate market, according to Sara Boutros, sector head for Mena real estate and financials at CI Capital. Chinese investors are returning to the Dubai real estate market, she said, as a result of pressure on the housing market in their home country and loosened travel restrictions.
International investment into the sector is supported by Dubai’s excellent residential rental yields of 6 to 7 percent and its investor-friendly climate, which includes a low transaction and rental income tax, a currency tied to the US dollar, and 0% capital gains.
Following Beijing’s lifting of its tight quarantine travel requirements and zero-Covid policy, buyers from China are anticipated to start buying again in the UAE.
In the midst of high demand and sustained economic expansion, Dubai’s real estate market is flourishing. Government programmes including retirement and remote worker residency permits have aided the sector’s post-pandemic recovery. The housing market boom, which has been fueled by an inflow of new immigrants, particularly wealthy Russian purchasers and executives in the cryptocurrency industry, is not anticipated to slow down anytime soon as a growing population, cheap taxes, and the general upbeat mood in the world economy, according to analysts.
According to Knight Frank’s most recent study, residential property prices in the emirate increased 17% year over year in the second quarter, marking the 10th straight quarter of growth.
According to Abdullah Alajaji, the company’s chief executive, Driven Properties, a Dubai-based business with offices in China, sold about Dh1.25 billion ($340 million) worth of properties to Chinese and increase of more than three times the Dh351 million from the same period in 2018 was made by Hong Kong investors in the first half of 2023.
The liberalisation of China’s borders “helped enormously,” but Beijing’s real estate debt crisis is causing domestic investors, who consider real estate as a secure place to deposit their money, to become fearful and look for new markets outside, according to Mr. Alajaji.
Due to the fact that Dubai has always been a popular vacation destination and because of what is occurring in China, the guy added, this year we are seeing an increase in Chinese tourists and people who are coming to make investment decisions here.
According to Mr. Alajaji, the company anticipates that Chinese investors’ investments in real estate would increase to about Dh2 billion in 2023 from Dh721 million last year as China’s property problems continue and its economic growth slows.
According to Mr. Alajaji, “2024 will be the year of Chinese property investors,” and he continued, “We’re barely scratching the surface because the last quarter of the year is the most liquid and records the most transactions, from both local and international buyers.”
According to data from July and August and huge groups of investors visiting Dubai to look at properties, the company, which has an office in Shenzhen, is already observing a surge in the growth pace, he added.
When asked how Chinese investment will grow in 2024, Ms. We anticipate growth to continue in the premium sector, Boutros retorted. When compared to the luxury real estate markets in London, New York, and other international cities, Dubai’s prices are incredibly attractive.
Although Dubai has seen a rise in house property prices to record highs, several analysts stated the demand from Chinese investors is not anticipated to significantly swell market levels.
According to Fadi Moussalli, executive director of foreign capital coverage at real estate consulting firm JLL, “Chinese investors are slowly making their way back to the UAE, and investment momentum in the country is expected to pick up.”
