September 27, 2022

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Dubai competes with the most important real estate markets in attracting Chinese investment

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The real estate sector in Dubai is expecting huge Chinese and Asian demand in the post-pandemic period, and the emirate is expected to compete strongly with traditional real estate markets, which are very important for Chinese investors, Abdullah Al-Ajaji, founder and managing director of “Derwin Real Estate” and managing partner of Lamar Development Company.

In reports to Al-Bayan, Chinese investors were among the top five nationalities investing in Dubai real estate before the pandemic and now, after more than two years of general closure and restrictions on movement and travel, Al-Ajaji explained. A big opening for overseas Chinese for investment, tourism and trade as China opens its doors to the world and returns to normal life.

He pointed out that the Chinese investor is facing various challenges in the real estate sector in his country due to the bankruptcy of the biggest Chinese real estate developer “Evergrand” and the chaos in the local market. On the other hand, China is the only country in the world to lower interest rates to stimulate the movement of the economy in general, including real estate, while other countries do the same. While raising, provides liquidity to investors, in light of these factors, the Chinese investor is waiting for promising international markets, he believes in their opportunities and long-term growth, and here Dubai is one of the 5 most important global markets for Chinese investors. Bangkok, Thailand, is their biggest market, followed by Greece thanks to its offering of residence visas to investors.

Al-Ajaji said in the past two years, as China continues to clamp down on travel restrictions and the movement of individuals, Dubai and the United Arab Emirates have launched a number of stimulus initiatives and quality economic laws, including the development of residential real estate. Visa, all these factors will encourage the Chinese investor to inject investments, and contribute to attract new segments of Chinese investors to the local real estate market, so that Dubai can compete strongly with the most important international real estate markets for Chinese investors. In the post-infection phase.

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favorite place
According to Al-Ajaji, all the factors that have contributed to the prosperity of the real estate sector in Dubai over the past two years have been an additional economic base for Dubai’s constituents and its reputation as a preferred destination for work, investment and housing. The growth data seen by the emirate since the start of the pandemic to the present confirms that the real estate market generally supports the continued momentum of prosperity. In addition to long-term resident visas for retirees and others adapted to global markets, including the Golden Residency System and full ownership of foreign investors in companies, including weekend transfers.

Home improvement
“Dervin Real Estate” managing director, at that time, huge liquidity was paid to reduce interest to stimulate the economy in light of the peak phase of the epidemic and the movement of all major global central banks. Within the markets, and individuals began to upgrade their homes in larger and wider categories and in better locations, and the outdoor space that villas and townhouses provided increased their demand while avoiding crowds and crowds in public spaces during the pandemic. All these trends have emerged both globally and domestically. At the end of 2020, Dubai was the first and most important city to reopen its doors to the world, a strategic and important step, he pointed out, as the world’s wealthiest people usually spend their winter holidays in luxury ski resorts. Places in the Alps and elsewhere are unable to do so in light of closures and restrictions.

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From September 2020 to 2021, Dubai real estate will receive more from Europe, especially from Germany, France, England, Belgium and Switzerland, in addition to Lebanon and other countries, in addition to Asian countries that have reopened their economies, especially Hong. Kong and many wealthy people from these countries began moving to Dubai, which boosted demand for various real estate segments, especially ultra-luxury real estate, and then local demand began to move.

maturity stage
According to Al-Ajaji, the march of the real estate market in Dubai has evolved and transformed from an emerging market to now reaching maturity. Previously, all segments and segments of the market moved in the same direction. The equation of supply and demand is not particularly clear in terms of growth rates or stability, including luxury properties and medium prices and other elements of the real estate market, and speculation is a very important aspect of the working methods. In the market, but now the situation is different. The continuous growth from September 2020 to present is not uniform, that is, as real estate prices have not risen in the middle segment, not including all real estate categories at the same rate. -Medium properties have the same proportions as luxury properties and are categorized into the ultra-luxury category, the latter of which has recorded higher price growth due to a lack of supply.

As the market matured, so did the concept of luxury real estate, and according to Al-Ajaji, this classification is commonly used to describe apartments in the city of Dubai, priced between two million and four million. dirhams, while demand is focused on ultra-luxury or luxury properties.

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Price performance
Al-Ajaji confirmed that the price performance of villas from September 2020 to date has generally been better than the performance of apartments. In general, offshore locations also saw strong price performance. Therefore, ultra-luxury villas are at the top in terms of price growth rates, followed by luxury penthouses and the villas sector in general and townhouses, regardless of their location, are third.

Al-Ajaji revealed that Dubai has attracted many real estate developers from countries around the world, especially from Europe and Asia, in the past in light of its efforts in the economy and tourism sector and the property and land sector. A large percentage of these developers are focusing on luxury real estate in light of the clarity of the picture. The supply in this sector is still limited.

Luxury real estate
Regarding the impact of high interest rates on the real estate market, Al-Ajaji pointed out that ultra-luxury real estate is a more defensive sector compared to other real estate market categories, as the largest proportion of purchases in this segment are made in cash and are not primarily dependent on bank financing. The supply of this category is still limited. There is, and owners of such properties do not have to sell due to their inability to keep pace with rising mortgage interest rates.

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