The Dubai real estate market continues to be an important investment destination for Asian expats.
In the first half of this year, Asian investors comprising Indians, Britons and Chinese nationals grabbed top spots for real estate investment in Dubai, according to Dubai Land Department estimates. While Indian expats ranked first for foreign investment, having made a total of 3,017 transactions worth AED 7.8 billion, British investors grabbed the second spot, having conducted deals worth AED 4.7 billion, followed by Pakistani investors with transactions worth AED 3.3 billion.
Whilst Dubai real estate may be more expensive than property in India and Pakistan, its high rental profit yield is attracting investors. Additionally, the UAE dirham is pegged to the dollar. This is a huge advantage for investors, as a rise in the dollar’s value will automatically increase the worth of dirham. Hence, investment in dirhams becomes more profitable than that in Indian and Pakistani rupees.
The Chinese real estate market has changed significantly in the past few years and has been characterised by low rental yields, stock market downturn, low interest rate, high prices and poor capital gains. Faced with this scenario, Chinese investors are globalising their property portfolios and have found the UAE’s, especially the Dubai real estate market, a savvy and rewarding investment option. Chinese nationals were the seventh biggest investors in Dubai real estate in 2015, investing around $460 million. This has been attributed to the recent yuan devaluation and change in investor outlook from established markets such as London and New York to other global cities that can offer better returns on real estate. In fact, more than 300,000 Chinese have been estimated to visit Dubai each year as tourists, which is a good indicator of real estate transactions.
However, this does not mean that Asians are not investing in real estate back in their homeland. According to recent estimates, more than 90 percent of Pakistani expatriates in the UAE spend their income to purchase properties back home in Pakistan.
With more Asian investors investing in Dubai real estate, the UAE’s developers are keen to display the emirate’s impressive potential to this huge Asian market. The growing influence of Pakistani investors on Dubai real estate was evident at this year’s The International Property Show, the Middle East’s biggest property sales platform for local and international real estate markets. The exhibition saw the debut of the Express Pakistan Pavilion which showcased residential, commercial and mixed-used property projects from major cities of Pakistan such as Islamabad, Lahore, Karachi, Peshawar, Faisalabad and Sialkot.