Chinese Investment in Dubai's Real Estate Market

As the Expo 2020 draws nearer, the Dubai Government has been on top of their game with new laws, partnerships and more to make the country a lucrative investment option for investors from all over the world - especially Chinese real estate investors. According to the Dubai Land Departments (DLD) 2018 report, Chinese investment in Dubai real estate accounted for AED 1.7B of the total transactions in the first nine months of 2018. Chinese investors were also among the top four foreign nationalities who invested in Dubai which clearly shows there is heightened interest from Chinese investors in the city's real estate market. So to help us understand why there is an increase in Chinese real estate investments in Dubai, we are in conversation with the leading property experts Lee Wang, CEO and Black Pang, COO from Huaxia Real Estate. Let’s take a look at what they had to say about the increase in Chinese investment in Dubai real estate.

Factors Promoting Chinese real estate investments in Dubai's real estate market

The increase of Chinese real estate investments can be credited two major factors: the affordability of property prices and flexibility of payment terms. When speaking about the affordability of property prices, Lee mentions that investing in the properties in Dubai is much more lucrative than investing in big cities in China such as Bejing and Shanghai. He elaborates by comparing property prices in China with Dubai - in Downtown Shanghai property prices would be around AED 4k - AED 6k per sq. ft, however, you can find similar investment opportunities in Dubai that would range between AED 1.6k - AED 2k per sq. ft. This bodes well with investors as they are able to find investment opportunities with a higher return on investment (ROI). In terms of flexibility of payment terms, Dubai offers Chinese property investors the option to pay in instalments over a period of time, rather than paying the entire amount upfront.

Another aspect that has contributed to the rise of Chinese investment in Dubai real estate is the fact that DLD has two representative offices opened in Beijing and China respectively. Lee says that this move was a great initiative which has strengthened the trust of Chinese investors in Dubai.

Property investment opportunities for Chinese investors in Dubai

When speaking about the preference of property investments Ms Black mentioned that Chinese investors steer toward the off-plan property market in the city rather than ready properties. This can be credited to the flexibility of payment plans that comes from investing in off-plan properties in Dubai - investors don't need to worry about taking out a mortgage; payments can be made steadily over a period of five, six and in some cases, seven years as per what is offered by the developer. Lee added that payment plans are something that is not available in China - property investors need to pay mortgages upfront when investing, which is something that isn't easy for many investors.

Downtown Dubai Area — Downtown Dubai is a popular area for property investments by Chinese in Dubai

Dubai is known for its plethora of properties for sale with new ones being added every week. When it comes to Chinese property investments, apart from flexible payment plans, the location of the property is a key factor. Black says that for Chinese investors the iconic tourist hub of Downtown Dubai is the most popular area for investing in property. This is followed by the waterfront community of Dubai Marina - as it has a high demand by renters. Dubai Creek Harbour is also another popular area for Chinese investments in Dubai.

The future of Chinese Investment in Dubai Real Estate

The growing number of Chinese investors in Dubai is something that bodes well for the market, especially as the Expo 2020 draws near. Apart from DLD opening offices in Beijing and Shanghai, Emaar also announced in 2018 that they will be constructing the largest Chinese neighbourhood in the Middle East, which was announced in conjunction with the historic visit of Chinese President Xi Jinping to the UAE. Lee and Black both spoke on how this initiative was well received by Chinese investors. Black mentioned that after the announcement many investors approached Huaxia Real Estate inquiring about investing in Emaar's Chinatown district.

Dubai currently has a target of attracting over AED 1B Chinese real estate investments in 2019. This initiative not only promotes investments by Chinese property developers in Dubai, but it also opens doors for many UAE-based developers to expand to China. With so many, great things happening, investment by China in Dubai's property market is expected to see a rise followed by a boost the economy of the city. Both Lee and Black are looking forward to 2019 and are committed to providing investors from China and other countries the support to make the best investment decision.