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In a remarkable 130% jump, Chinese investors return to the Dubai real estate market

Chinese investors have reportedly returned to Dubai’s real estate market with fury, as seen by the astonishing 130 percent surge in residential property investments in the city during the first half of 2023 compared to the post-Covid period, according to the most recent market data.

Due to the increase and the estimated 27 percent decline in apartment sales in the country of the Far East, which is much lower than anticipated given the country’s trends toward urbanization and the high demand for improved housing, industry insiders see it as a classic case of China’s loss becoming Dubai’s gain. This is due to the fact that, in Q2, 2023, compared to the same quarter the year before, China’s economy grew at a slower rate of 3%.

The Chinese investors are now investing in spacious housing units in prestigious neighborhoods like Downtown Dubai and Jumeirah Golf Estates, which has seen a significant increase in average property prices recently. This is in contrast to their preference for smaller studio and one-bedroom apartments in the pre-pandemic period when they were the leading foreign investors in the emirate.

Cash is now king for Chinese investors

The report also showed an intriguing trend, with as much as 78 percent of Chinese buyers currently opting for cash payments over alternative means of payment when buying real estate in Dubai.

“Chinese [investors] transact with cash frequently for property deals. They seem to have accumulated enough wealth before moving for overseas investment, so they can pay full cash to enjoy the easiest transaction process,” Faline Huang, Chief Financial Officer of Allsopp & Allsopp, told Arabian Business.

Chinese citizens’ travel restrictions were loosened at the beginning of 2023, which allowed them to once again invest in Dubai’s real estate. This was a turning point for Dubai’s real estate market, which experienced the highest number of sales transactions and total sales value in the city’s history in Q2 2023, according to the Allsopp & Allsopp H1 2023 report.

Chinese staging a forceful comeback to reclaim their pre-pandemic position

Chinese investors have consistently been among the top international investors in the Dubai real estate market in the years before to the Covid-19 pandemic’s outbreak, particularly in 2019.

Chinese investment in Dubai real estate, however, declined as the virus spread and travel restrictions ensued. An influx of Russian purchasers quickly filled the gap after tensions in Ukraine began to rise.

By the end of 2022, Russian citizens had surpassed all other buyers of real estate in Dubai.

“Despite the slower Chinese economic growth – and the attendant fall in apartment sales in that country – real estate investment numbers in H1 in Dubai reflect the completely opposite result when analyzing Chinese buying behavior since they made a comeback on the real estate charts this year,” Allsopp & Allsopp said.

“Foreign overseas investment will continue to pour into the Dubai real estate market – especially off-plan sales, with China increasing buyer activity and set to rival Russian investment levels by the end of the year,” Lewis Allsopp, the firm’s CEO, told Arabian Business.

He also predicts that the city’s luxury real estate industry will continue to expand, with mega-villas and branded luxury complexes setting new sales records thanks to the growing Chinese preference for larger housing units in Dubai’s affluent areas.

“Demand for established residential villa and townhouse communities and premium water-facing apartments will continue to increase [in the second half of 2023] in line with H1 trends,” Allsopp said.

In support of the CEO’s predictions, Huang stated that the UAE and China’s strong and growing relationship will eventually lead to an increase in Chinese investment in Dubai’s real estate sector.

“UAE and China governments have tight relationships and very strong bilateral trade ties. Dubai’s commercial-friendly environment attracts Chinese investment as a low-tax and safe emirate, providing a comparably desirable yield on investments,” she said.

Post Courtesy: Arabian Business

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