China the ‘wild card’ for Dubai property sales, says Damac

Reuters

• Easing of Covid restrictions should release influx of capital
• China-Gulf business relationship getting closer
• Damac spots opportunities in Saudi Arabia

The reopening of China following their strict Covid lockdown will be the “wild card” that propels the Dubai real estate surge for at least another 18 to 24 months, says a senior executive at Damac Properties.

“It’s no secret that there is a large influx of Russian buyers. European buyers have [also] increased drastically,” Ali Hussain Sajwani, managing director of operations and technology, told AGBI.

“And there’s a wild card today that most people are missing out on – China.

“If China opens up in 2023, we are going to see a huge influx of liquidity coming into Dubai from that market, which was the case in 2017, 2018 and in 2019.”

• China signed ‘$50bn of deals’ with Gulf nations in three days
• Dubai’s mid-market property sales next to flourish, says Damac

A total of 25,456 sales worth AED69.72 billion ($18.98 billion) were recorded from July to September, marking an increase of 62 percent in volume and more than 65 percent in value, compared with the third quarter of 2021, according to a recent report by Property Finder.

Betterhomes, a Dubai real estate broker, also found that the top buyers in the first half of the year were from India, the UK, Italy, Russia and France. The number of Russian buyers surged 164 percent year-on-year in the first six months of 2022, while the numbers for France and Britain rose 42 and 18 percent respectively.

While China has been absent due to its strict zero Covid policy, rules have started to ease in recent weeks.

“Signs are showing that they’re planning on opening up,” Sajwani said. “Hong Kong has already opened up, and a lot of people are not accounting for that big, big influx of liquidity and capital that could occur in Dubai.”

Chinese President Xi Jinping’s three-day visit to the Gulf earlier this month is evidence of the increasingly closer ties between the two regions.

China signed investment deals worth an estimated $50 billion with Gulf nations during the visit. This is on top of the fact that GCC-China trade has already doubled from $90.6 billion to $180 billion between 2010 and 2021, according to the Asia House think tank.

The UAE accounts for more than 60 percent of China’s exports to the region and the Emirates is home to more than 6,000 Chinese businesses.

Damac’s parent company was set up 40 years ago this year, with the property division established twenty years later. Sajwani said the anniversary comes as it celebrated a record-breaking year for homes sales.

“It is a record year for us. It’s been our best year since Damac Properties was founded in 2002. This year we’ve recorded sales which are 100 percent more than our sales last year,” he said.

The developer has built 42,000 homes since 1982 and has another 28,000 in planning and development.

Sajwani said it has a busy schedule of launches coming up, which he hopes will cater to the anticipated influx of Chinese buyers.

“In Dubai we have more products which will be launching in the coming six months,” he said.

“Most of them are under design at the moment. We believe this market has at least another 18 to 24 months.”

Damac this year launched in the US with a Miami project due to begin soon. Sajwani believes there are more opportunities in Europe, the US and UK, as prices have not yet hit rock bottom.

“We’re seeing many opportunities in markets like Germany [and] the UK.,” he said. “We think there’s more of a downside left in the European [market]. We don’t think we’ve seen the bottom. 

“We’re going to see what happens after this winter in the US. We moved on Miami. We thought it was a great deal.

“We’re actively looking at the US as a market. We’re looking at global cities. We want to be present in global hubs: London, Toronto, Miami, Hong Kong, New York, Los Angeles.” 

In the Gulf, one of the booming markets is Saudi Arabia and the executive sees more opportunities there in 2023.

“We’ve delivered two projects in Saudi Arabia,” Sajwani said. “Saudi is a market dear to our heart. We’re always looking at opportunities, and if the right one presents itself in Saudi, we’ll be more than happy to move on it.

“We’re always actively looking for the opportunities. But of course, you need the right thing to be on the table to move on.”