The property market in Dubai is booming and has drawn attention from investors in China, as the country has been looking towards greater economic cooperation, foreign direct investment and trade since the travel restrictions were lifted.
Chinese investment in Dubai has surged because of political factors and high stability and this has seen luxury real estate experience an increase in demand.
Juwai IQI, the Asian real-estate technology group, shared data showing that in the first half of 2023, UAE had reached the 8th spot in the list of top 10 destinations of Chinese buyers.
This put the UAE ahead of Vietnam and Singapore. In recent years, the UAE has climbed up the list rather quickly.
In 2021, it had ranked 13th and had entered the top 10 list for the first time last year at the 9th spot and has now climbed up to 8th.
After China lifted its COVID-19 travel restrictions, there was a rise in the number of Chinese visitors to Dubai.
In fact, data shows that they saw a year-on-year increase of about 300% to reach 260,000 visitors in the first half of this year.
This was also due to greater flight connectivity and the visa-on-arrival facilities offered to visitors and this trend is expected to continue in the second half of the year.
Agility, a luxury consulting firm published a TrendLens report back in May, which revealed that in the next 12 months, over 20% of Chinese millionaires planned on visiting the Middle East.
It further said that consumers had managed to accumulate significant capital for making investments in international real estate.
Even though economic growth in China had slowed down in 2023, the country managed to add more households to high-income and upper-middle classes than any other.
Data from EY shows that there would be a 50% increase in the number of households in the high-income category that can buy international real estate by 2025.
The CEO and co-founder of Juwai IQI, Kashif Ansari, said that there will also be a proportionate increase in the Chinese demand for international real estate.
Ansari said that number of high-income and upper-middle urban households would rise to 209 million by 2025.
He went on to say that in terms of savings, Chinese already had world-leading rates and they were accentuated due to the pandemic.
There was a rise in Chinese deposits in the first 9 months of last year to a staggering 26.3 trillion Chinese yuan, which is equal to $3.6 trillion.
Chinese investors prefer to make investments in international real estate because they know they can benefit from price appreciation.
Plus, they can also get dependable long-term foreign currency income that does not depend on the Chinese economic cycle.
Ansari said that with interest rates on the high side, Chinese investors have an advantage over local buyers because they have access to capital.
In recent months, there has been a growing appetite amongst Chinese investors for Dubai real estate, something that property brokers have noted.