Dubai has a huge Chinese expatriate business community of about 150,000. While some are businessman tapping Middle East markets with Chinese goods, many have been simply punting Dubai property for short-term profits due to extremely lax real estate rules.
Thus in a sense, an Abu Dhabi bailout of Dubai must be bailing out some of these folks. In addition to real estate speculators from other nations as well, of course.
China Stakes: “Among the thousands of Wenzhou folks in Dubai there is nobody who hasn’t had as investment in local property market,” says Chen Zhiyuan, president of Wenzhou Chamber of Commerce in the United Arab Emirates, though at least 20 Wenzhou businessmen he knows have recently abandoned real estate investment in Dubai, selling the houses bought for hundreds of thousands of dollars.
Some Wenzhou people have done business in Dubai as developers focused on investment, divided into long-term and short-term. They build residential housing to sell to make money quickly, with which they built entertainment, health, and hotel complexes, putting them under management for long-term profits.
Wenzhou businessmen as individual investors are often more interested in short-term investment, which is related to the trade freedom in Dubai.
Dubai’s real estate transactions do not require pre-sale permits. Deals can be done so long as drawings of the property are seen. Under normal circumstances, investors need pay only 10% down payment to developers, and then another 5% to 10% three to five months later. After the second payment, most of the Wenzhou investors do not continue to hold the property under construction and sell at that time, taking 100% return from the property under construction with a value of 3 million dirhams (5.57 million yuan).
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