UAE real estate companies say that they have not faced any payment challenges from existing buyers from China.
Developers not banking on Chinese buyers in new projects for now owing to Covid-19
Property developers in the UAE are discounting Chinese buyers from their new projects and also see less participation due to growing coronavirus concerns.
Real estate companies say that they have not faced any payment challenges from existing buyers from China but will wait for six months before committing to them again for their projects due to prevailing uncertainty.
“In general, UAE developers have lowered their budgets for sales and marketing aimed at potential buyers from the Far East, specifically those from China. We expect less participation from the Chinese buyers when it comes to new projects, at least until the third quarter of 2020,” said Kalpesh Kinariwala, founder and chairman of Pantheon Group.
“We do not foresee any issues with regards to the existing Chinese clients with post-handover payment plans. We do, however, expect to see less participation from Chinese investors for at least the next six months,” he added.
Dubai-based Samana Developers was also pinning hopes to attract a fairly large chunk of its sales coming from Chinese buyers for its newly-launched Dh100 million Samana Golf Avenue project in Dubai Studio City. But the developer has shifted its focus and will look to tap buyers from other countries.
“We were expecting 40 per cent of sales from Chinese buyers. Despite 0 per cent participation from Chinese customers now, we will still achieve our target and expect to sell out the project in a maximum of four to six weeks time,” said Imran Farooq, CEO of Samana Developers.
Coronavirus has caused widespread concern across the world, affecting travel and tourism to and from China. Also, investments to and from the country have also taken a hit due to severe travel restrictions in China and other countries hit by coronavirus.
According to the Dubai Land Department (DLD), Chinese investors had pumped in up to Dh14.3 billion into the emirate’s property market by August 2018 and were among the top 10 investors. They also ranked fifth by international investor nationality as per DLD transaction data for the third quarter of 2018, investing over Dh1.7 billion in the emirate’s property market during that period. As per Dubai Tourism, Chinese tourists are the fifth-largest source market by visitors to Dubai, accounting for over 1.03 million in 2019, marking a 15 per cent year-on-year increase.
Atif Rahman, director and partner of Danube Properties, said as developers, they have not felt any impact until now from the absence of Chinese buyers because their customers are mainly those Chinese who are based outside China.
“The magnitude for the problem is high locally in China. Typically, our Chinese buyers do not include only Chinese domiciled in China. We attract Chinese customers across the globe including the Chinese nationals living outside of China,” Rahman said, adding that it is not advisable to preempt and negate any business opportunity. “Chinese investors bring a larger amount of foreign capital in the UAE and rest of the Gulf region. They remain integral part of our business,” he said.
According to Prathyusha Gurrapu, head of research and advisory at Core, Chinese tourists and investors have been a growing demographic in both tourism and real estate sectors over the last few years.
“While the interest levels in the UAE property market remain strong from this demographic, in the interim, we expect Chinese investment activity in the UAE as well as globally to be impacted as the situation evolves over the coming days,” she said.
Waheed Abbas/DubaiFiled on February 25, 2020 | Last updated on February 25, 2020 at 10.44 pm
Source :Khaleej Times