Who is driving Dubai's off-plan luxury properties?

Off-plan sales for high-end properties in Dubai are very strong and have been boosted by international investors, primarily from China, according to an expert.

“High-end off plan sales being very strong in Dubai and this is being boosted largely by international investors and Chinese investors are playing a lead role here,” Tommy Trask, Director, Corporate Ratings, Standard & Poor’s, a global ratings agency, said recently.

About 1,000 Chinese investors spent Dh1.3 billion on land, residential units and office real estate in Dubai in 2013, according to data from the Dubai Land Department.  It is not known how much have they invested in the first quarter 2014.

Chinese investors top the most influential buyer nationality list, followed by investors from Singapore and Russia, who come in second and third places, respectively, a report released last year by Knight Frank revealed.

Parvez Khan, Chairman, Pacific Ventures, told Emirates 24|7 he is witnessing increased demand from Chinese investors in off-plan projects in Dubai.

“We have seen Chinese investors buying… they are investing in off plan properties and we have a few of them investing in our project,” he said, without revealing the total number of investors in his Downtown Dubai project.

Indian, British and Pakistani nationals topped the list of expatriate investors in Dubai's real estate market in 2013 compared to 2012, topping the list of 140 expatriate property buyers.

The Hurun Report in association with ILTM Asia and The Chinese Luxury Traveller 2014, released on Tuesday, said Dubai has been ranked in the top three most popular destinations amongst high-net-worth Chinese travellers, rising from eighth place in 2013 to third in 2014.

In 2013, China was one of the top 10 source markets for visitors to Dubai. The emirate welcomed 275,675 visitors from China, an increase of 11 per cent compared to 2012 and the market remains a key focus for Dubai’s Department of Tourism and Commerce Marketing.

Although developers selling off plan have introduced their own measures to stop flipping, the International Monetary Fund (IMF) has said that Dubai is considering introducing new fees and restrictions to stop flipping of off-plan properties.

“Imposing additional fees and restrictions on reselling off-plan properties, as currently under consideration, would further discourage speculative demand,” the IMF said.

Dubai’s increased property registration fee from 2 to 4 per cent last October with the UAE Central Bank introducing a mortgage cap to cool down the property market.

Knight Frank expects property prices in Dubai to rise by 10 to 15 per cent this year, with a number of global research firms ruling out a correction in the residential property market in 2014 and dismissing fears of an impending bubble.

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