Wealthy Chinese investors eye Dubai realty market

By Zhang Lulu
0 Comment(s)Print E-mail China.org.cn, November 25, 2015
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Chinese investors have never tired of snapping up properties across the world, and now, they are eyeing the Middle Eastern hub of Dubai.

Chinese investors have never tired of snapping up properties across the world, and now, they are eyeing the Middle Eastern hub of Dubai, according to a report by China Business News.

Damac Properties, a luxury property developer in Dubai of the United Arab Emirates (UAE) recently signed an agreement with Qfang.com, a Chinese online real estate agent, enabling the latter to become its Chinese agency of high-end real estate in Dubai. Damac's managing director Ziad El Chaar said that China is a crucial market for the Dubai developer.

Data shows that Chinese investment in the Dubai property market reached 2.24 billion yuan (about US$351 million) in 2014, a year-on-year increase of 300 percent. The investment totaled 2.07 billion yuan in the first eight months of this year.

Ten percent of Dubai's population is Chinese, coming mostly from southern Chinese cities such as Guangzhou and Shenzhen. Additionally, 4,200 companies have set up offices in Dubai, according to Chaar.

In addition, the number of Chinese tourists to Dubai has tripled this year, as the UAE government is talking with their Chinese counterpart to increase the number of flights from China to Dubai.

The projects that Damac intends to sell to Chinese are priced at 1.5 million yuan to 15 million yuan, very affordable for well-to-do Chinese families and investors.

Unlike the European and American realty market, the market in Dubai is more investment-driven. According to Chaar, all five projects his company signed with Qfang.com are investment-oriented -- seeking high returns. The return on investment can be a tax-free 7 percent to 8 percent, which is higher than that in Canada, the United States and Australia.

Dubai's realty market boomed in 2008 but plunged into recession due to the global financial crisis. The market hasrecovered rapidly in recent years, drawing investors from India, Britain, Iran, and China.

In fact, Chinese are not the most enthusiastic investors in Dubai. Data from the first eight months of this year shows that India tops the list of foreign investors in Dubai's realty market with 23.3 billion yuan, followed by Britain, Iran, Canada and Russia. China comes in sixth.

The Chinese agency Qfang.com said Dubai is the first stop of the agency's overseas expansion, and that Dubai stood out because of its stable political and economic situation, competitive industrial structure, sound financial system and stable returns.

Despite the recovery in Dubai's property market, some investors are concerned about a quarterly contraction of 5.2 percent in the third quarter last year which has been interpreted as another collapse of the city's realty bubble.

However, Damac's Chaar attributed a more ample land supply to the contraction, adding that the realty market is stable. However, he also maintained that the market might be overheated if the prices continue to increase this year.

Chinese investment in the entire overseas market registered a record US$16.5 billion in 2014, an increase of 46 percent. The investment is expected to reach US$20 billion this year.

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