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News Middle East Chinese property investors looking to Dubai for real estate bargains
News Middle East Chinese property investors looking to Dubai for real estate bargains
Chinese property investors looking to Dubai for real estate bargains |
| Monday, 25 January 2010 | |
 Chinese flock to Dubai They have already been bussed around to view repossessed properties in Florida but now coach loads of Chinese investors are set to tackle Dubai. There is so much interest in buying cheap properties in the emirate where prices have fallen by up to 50% in some locations, that a group of Chinese investors are due to arrive in Dubai next month.The group of twenty investors from the Zhejiang province in eastern China plan to make the trip towards the end of February. As prices soar in China they see Dubai as offering considerable investment opportunities. ‘When they learned of such an opportunity to visit Dubai, more than twenty members expressed an interest in joining the visiting group,’ said Zhou Dewen, head of the Wenzhou SME Business Development and Promotion Association. ‘Although the economy there has not revived yet, we believe big business opportunities exist not only in property, but also in export trading,’ he added. The region already has a direct property link to the emirate. Around 150,000 Chinese expatriates live in Dubai and the report says around 20,000 of them are from the Wenzhou region. Zhou said that Wenzhou investors living in Dubai have already spent nearly $750 million on property. While they have lost nearly $150m in the price slump, which has seen prices drop by at least 50% percent from the peak, he says that it is small compared to what they have potentially earned overall. A Wenzhou buyer is also reported to have invested $28 million in an island on The World, the iconic project being developed by Nakheel. Meanwhile there is some hope for the real estate market with the latest report indicating that property prices in Dubai remained stable during the fourth quarter of 2009. The Colliers International Dubai House Price Index indicates that prices increased close to 1% above the third quarter’s results. The report, compiled using actual mortgage transaction data from a consortium of financial institutions, indicates a leveling of property values in the fourth quarter, following the 7% increase of the previous quarter. Over the 12 months of 2009 the Index also reported a total annual variance of just 1.7 basis points, further underlining a stabilisation trend. ‘We anticipate price fluctuations will become less pronounced as the market matures, providing early indications that Dubai house price values are getting closer to underlying values,’ said Ian Albert, Regional Director, Colliers International. In year-on-year terms, overall house price values fell 42% between the fourth quarter of 2008 and the same period in 2009, putting Dubai property prices at the same levels as the second quarter of 2007. The volume of market transactions declined 15% during the fourth quarter compared to the third quarter of 2009, the report also shows. Analysts attribute this more to the anticipated seasonal slowdown than the well publicised Dubai debt issues. ‘Anecdotally we have learnt that the announcement of the Dubai World debt restructuring has influenced purchaser sentiment, but in the context of seasonal adjustment it is difficult to assess to what extent at this stage,’ said Albert. ‘We now seem to have reached the point where the market is trying to find its natural equilibrium. While we have tracked marginal variations in the performance and prices of property types, it remains to be seen how the market will react to further news of Dubai World’s debt restructure as well as the banks’ end-year results,’ added Albert.
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