Chinese are showing less interest in Dubai market

Interest in the Dubai property market by Chinese buyers fell in the third quarter of 2019 as the outlook for the sector remains difficult owing to oversupply fears.

Buying enquiries made through Juwai.com, a portal which advertises overseas properties to Chinese buyers, dropped 15.3 per cent year-on-year during the quarter, but interest remains “healthy” overall, says executive chairman Georg Chmiel.

“Chinese buyers like the UAE and its long-term investment story, even if the current market is anaemic,” he said. “The UAE builds abundant supplies of relatively affordable luxury homes that appeal to the tastes of mainland Chinese buyers.

“The development industry is making a bigger effort to market their property to Chinese buyers by participating in marketing events in China and Hong Kong, building ties with local partners in China, and marketing online in Chinese.”

Average property prices in Dubai have slumped in recent years as developers focused on smaller, more affordable units and as investor concern has grown about an oversupply of units.

Cavendish Maxwell’s latest UAE Property Market report stated that average apartment prices in Dubai dropped 16.5 per cent yearon-year during the third quarter of 2019, while villa prices fell 15 per cent.

Apartment rents also dropped by 15 per cent.

In the first half of 2019, 20,978 new homes were completed in Dubai, and another 38,426 had a completion status of more than 85 per cent, with delivery scheduled by the end of the year, according to Property Finder.

Last month, the Dubai government announced the formation of a higher committee for real estate to better co-ordinate supply and demand between public and private sector developers.

The Dubai Land Department has been ramping up efforts to market to Chinese buyers, opening representative offices in Beijing and Shenzhen as well as launching regular roadshows.

Growth in the number of Chinese students in the city is contributing to demand, according to Mr Chmiel.

“In total, there are 30,000 international students in Dubai this year, and about 3,400 Chinese students,” he said.

“There is a direct link between increased numbers of Chinese students and higher Chinese property buying. Chinese families very often buy real estate where their children study.”

There are signs that wouldbe buyers are adopting a more cautious approach.

“Given the current weak market, it is likely that buyers today make more enquiries before completing a transaction, on average, than, say, two years ago,” Mr Chmiel said.