Dubai becomes increasingly attractive to Chinese investors

DUBAI: Dubai’s housing market has always had high profile investors that kept the port city’s real estate sector afloat through the thick and thin.
Previously, the top investors in Dubai’s real estate market happened to be British and Indian citizens.
But a group of fresh investors from China have surfaced in the emirate’s real estate market and they mean serious business.
Chinese investors are especially drawn to Dubai’s realty sector after the trend of affordable properties took over the port city’s housing market.
Here are some reasons why Chinese investors are ignoring the traditionally fruitful Western real estate markets and are betting their fortunes on Dubai’s lucrative realty sector.

Chinese visa-on-arrival

Dubai’s Ruler Sheikh Mohammed bin Rashid Al-Maktoum shared a tweet recently that revealed that the country’s Cabinet had approved granting visas on arrival to Chinese visitors.
This new visa rule for Chinese citizens is being seen by expert real estate developers as good news for Dubai’s property market, which will most likely see a surge in business activities.

Important international real estate investors

Recent studies show that on an annual basis, China invests $100 billion globally which makes them the third-largest foreign direct investor in the world.
An Ernst & Young report showed the number of Chinese investments in international markets has risen even though the total global foreign direct investment fell sharply between the years 2011 to 2015.
Over the years most Chinese investors have preferred Dubai’s property market over other global investment destinations.
Due to this, the Chinese became the seventh biggest real estate investors in Dubai in the first nine months of 2015.
During this time, Chinese investors invested around $460 million in the emirate’s real estate industry.

Why are Chinese investors more interested in Dubai’s realty sector?

It goes without saying that continuous government intervention in China’s housing market by the government has thrown the local property market in limbo.
Government intervention in China’s real estate market has led toward the market becoming over-valued and over-stocked.
In simpler terms, properties in leading Chinese cities have moved toward the high-end in regard to prices.
According to National Bureau of Statistics of China, in the first nine months of 2015, the value and the area of new residential property sales in China rose by 18.2 percent and 8.2 percent respectively as compared to the previous year.

Lucrative Rental Yields and High Capital Appreciation

According to UAE property portal Bayut.com, rental yields in Dubai can climb as high as 8 percent to 10 percent in select apartment categories.
Moreover, yields for luxury villas can amount to 5 percent to 6 percent annually, making the city an extremely lucrative investment option when compared to global competitors.
On the other hand, average prices of houses in China have risen beyond the affordability bracket.
According to data released by Colliers International, the average sales price of new houses in Shanghai rose by 18.6 percent to $17, 538 per square meter in Q3 2015 as compared to the previous year.
In Beijing, existing home prices rose by 4.9 percent ($23, 874 per square meter) in November 2015 compared to the corresponding period in 2014, according to Century21 China Real Estate.

Growing Chinese expat population in the UAE

According to data released by Juwai.com, the Chinese population in Dubai has grown from 150,000 in 2010 to 230,000 in 2015, showing a rise of close to 53 percent.
On the other hand, the number of Chinese visitors arriving in Dubai also increased by 29 percent in 2015 to hit the 450,000 mark.

International property conventions woo Chinese investors

Earlier this year, the Hong Kong Convention and Exhibition Center hosted the Dubai Property Show from January 28 to 30.
UAE-based real estate developers held exhibitions at the show which allowed Chinese investors to better understand the business trends in UAE’s housing market.
The UAE has been the choice destination for a large variety of real estate investors since the country decided to open their markets to foreign investment.
Dubai has been specifically instrumental in taking the Emirati real estate sector to new heights.
Once again the real estate market of Dubai has created an opportunity for more Chinese investors to come here and invest in the housing sector.
According to JLL MENA, during the first quarter of 2016, Dubai’s total residential stock was around 458,500.
In September 2016, around 27,000 new housing units were to be added to the Dubai property market which has created space for further investments.
Therefore, it does not seem likely that Chinese investors will abandon Dubai’s real estate sector any time soon.
In fact, these investors are more likely to invest long term in the emirate’s real estate sector owing to affordable housing units springing up around the city. (https://www.bayut.com/)