Shanghai vs Dubai: Where should you invest in property?
- Dubai vs Shanghai Property Markets
- Payment Options
- Cost of Living
- Lifestyle Dubai vs Shanghai Comparison
- FAQs
Dubai and Shanghai are two bustling metropolises that attract tourists and property seekers. As business hubs in the Middle East and China, these two cities have become top destinations for real estate investments. However, each city is distinct beyond property prices – with its unique cultural offerings, quality of life, cost of living and more, all of which you need to examine when searching for a home.
If you plan on investing in a property in Shanghai vs Dubai, this article is for you. We consider all the key factors, helping you make an informed decision.
Comparing Property Markets
As an investor, you’re probably considering the financial aspect of buying in either city. So, let’s get to it first.
Dubai has apartments and villas for varying budgets, namely affordable, mid-tier and luxury.
In 2023, the average ROIs on property in Dubai increased from 7% to 8.5%*. Different bed types are available based on preferences, ranging from studio flats to 5 and even 7-bedroom villas. Budgets can go as low as AED 352k for a studio apartment for sale in Dubai Silicon Oasis to as high as AED 14.3M for a 7-bedroom villa in DAMAC Hills.
Whatever your requirements, lifestyle and budget, finding the right property in Dubai is relatively easy, owing to the diverse real estate landscape. There are many options for suburban villas, high-rise skyscrapers, hotel apartments or affordable apartments. Dubai Marina, International City and Jumeirah Lake Towers are great areas for property investment in Dubai.
- STUDIO
- |
- 1 BATH
- |
- 421 SQFT
- 2 BEDS
- |
- 3 BATHS
- |
- 1170 SQFT
- 4 BEDS
- |
- 3 BATHS
- |
- 1844 SQFT
On the other hand, Shanghai has a property market where prices are constantly at an all-time high. Being the most populous city in China, it attracts youth from all over the country. This has led to a demand for housing.
The average property price is AED 18,961.70* per sq.m. Compared with Dubai, where the average property price ranges between AED 1,274.62 to AED 1,506.37, Shanghai is definitely on the higher end of the price spectrum. Average ROI ranges from 5.4% to 7%.
Top Chinese developers like Greystar Real Estate Partners and Warburg Pincus want to develop more rental homes to match demand. To summarise, property prices in Shanghai (both sales and rent) are skyrocketing!
While property prices in Shanghai are high, the city offers opportunities for buy-to-let investments and short-term rentals. Areas like the Bund, Pudong and Former French Concession have become popular among tourists and luxury property investors. You can find a mix of luxury apartments and sprawling villas in these areas, offering great lifestyles and ROIs. Being located in a historically significant area adds to the charm.
Payment Options and Mortgages
An advantage of buying properties in Dubai is the number of attractive payment options available. You can book an off-plan property in Dubai for 5% of its total value and pay gradually until handover. Banks in the UAE also offer financing options, such as up to 80 percent mortgaging for secondary property and 50 percent for off-plan.
This is not feasible in Shanghai, as banks offer an 80 percent loan-to-value ratio. Another fantastic advantage to buying property in the UAE is no tax! Shanghai taxes property buyers and adds income tax if you earn a salary here.
Cost of Living Comparison
If you plan on living in a country, the cost of living is crucial. Comparing food and utility prices, we can say that Shanghai’s living costs are cheaper than in Dubai. Consumer prices are 52.8 percent higher in Dubai; however, local purchasing power in Dubai is 63 percent higher than in Shanghai.
We calculate the cost of living by examining various factors, such as utilities, transportation and grocery costs. Although certain grocery items in Dubai are cheaper than in Shanghai, things like internet, transportation, and leisure are cheaper in Shanghai.
We can connect this to the population difference between both cities. Dubai has a population of 3.3M, while Shanghai is home to 26.32M people. Having more people opens up more affordable options for dining, leisure, groceries and other needs.
Lifestyle in Shanghai versus Dubai
Quality of life is important if you plan to buy a property in either Shanghai or Dubai. Publications such as Conde Nast Traveller and Georgetown University have featured Dubai as a safe travel destination offering excellent quality of life. They also take safety for women, accessibility for the differently abled and lesser crime and theft rates into account.
One giant plus for Dubai is the lower population density, 400 people/km², compared to Shanghai’s 3,600 people/km². Lower population density is associated with better quality of life, factoring in things like less cramped housing and lower traffic.
Although today, Dubai and Shanghai seem similar with their skyscrapers and shiny streets, the things in common stop when you enter the past. Shanghai was a fishing and textile town on the banks of the Yangtze River. After the Opium Wars, it was one of the five cities that had opened to European trade, making it a city thriving with cultures and interests. The city has seen wars, emperors and empires taking control over the years to become the superpower it is today.
Dubai was established as a fishing town in the 1800s, although there are historical artefacts dating back to the 3rd and 4th centuries. The discovery of oil led to a construction boom. This, combined with trade, technology, real estate and other revenues, has made it one of the world’s fastest-growing economies. It is a relatively younger city in comparison to Shanghai.
Dubai offers the best of Middle Eastern culture, such as the food and architecture. You’ll find skyscrapers, attractions like the Burj Khalifa and Burj Al Arab, and many resorts and avenues for relaxation. On the other hand, Shanghai offers the best of Chinese culture, with loads of museums, art galleries, temples and cultural activities.
Frequently Asked Questions
What are the best areas to rent in Dubai?
If you plan on staying in Dubai as a resident, areas like Dubai Silicon Oasis, Jumeirah Village Circle and Al Nahda are great options. A great resource that would help is our guide to renting in Dubai based on your salary.
Can you own 100% property in Dubai?
Yes! ‘freehold’ properties, or properties located in specific areas designated as freehold, are one hundred percent owned by expats. Areas include Barsha Heights, Arjan, DIFC and more; you can check out our complete list of freehold areas in Dubai.
Should I choose to invest in a property in Dubai or Shanghai?
On comparing various factors, your budget and requirements should be considered when choosing between Dubai and Shanghai. One important point to note is that if you’ve got a tighter budget and require a mortgage or flexible financing, Dubai is the place for you. This, with no taxes, saves you quite a headache in finances.
Although Shanghai offers a cheaper cost of living and more to explore, Dubai offers the undeniable allure of a high quality of life and luxury recreational spaces. If you’re a parent, school fees are cheaper in Shanghai than in Dubai. Of course, international school fees are significantly higher than public schools in Shanghai. The quality of education in both cities is top-notch, opening doors to the world’s best universities.
However, the safety of your children and the multiple activities available are a plus for Dubai. Think of it this way: if your child is an adventure seeker looking to explore, being in a country as big as China gives them a ticket to probe various industries and avenues in life. Living in Dubai has a more sheltered lifestyle, which you can curate for your children based on their interests.
To conclude, there are pros and cons of buying property in Dubai. So, what speaks to you? A Chinese metropolis or a Middle Eastern business and luxury hub!
Learn more about Dubai and the UAE with MyBayut, the region’s favourite property portal.
*Based on data from Bayut Annual Sales Market Report 2023 and Global Property Guide.
