Enquiries into Dubai property dips among Chinese buyers, Juwai finds

Number of enquiries recorded by portal Juwai.com falls 15.3 per cent year-on-year

Lending to the residential real estate sector stood at Dh243.5 billion in 2018, according to the UAE Banking Federation. Reem Mohammed / The National

Interest in the Dubai property market by Chinese buyers fell in the third quarter of 2019 as the outlook for the sector remains difficult due 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, according to executive chairman Georg Chmiel.

“Chinese buyers like the UAE and its long-term investment story, even if the current market is anaemic. The UAE builds abundant supplies of relatively affordable luxury homes that appeal to the tastes of mainland Chinese buyers," said Mr Chmiel. "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 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 year-on-year during the third quarter of 2019, while villa prices fell 15 per cent. Apartment rents also dropped by 15 per cent, while villas and town houses recorded a 12 per cent decline in rental values.

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

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 in the country.

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. 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."

However, there are signs that would-be buyers are adopting a more cautious approach.

“Our data tracks buying enquiries made by serious purchasers. However, we cannot report on what share of these enquiries become transactions," Mr Chmiel said.

"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.”