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Dubai - The Destination of Choice for Buyers from Hong KongJune 10, 2020
Dubai has often shared the global spotlight with other major metropolises such as Singapore and Hong Kong, and often draws comparisons to the latter. Even now, amidst the uncertainty that has gripped the world, Dubai remains a reliable and safe destination for those that are able to travel. Before the pandemic, the emirate had become a major focus for residents of Hong Kong, seeking a lifestyle quite similar to what they were familiar with. Now, that interest has become stronger than before, as the search for a comfortable lifestyle gets mixed in with a need for security. What similarities does Dubai have to Hong Kong, and what makes it a more viable option as both a principal residence and a dependable investment?
On the surface, the similarities stand out easily. Both cities boast a cosmopolitan population, are global hubs of business and finance, and have a fairly central location in the world. They have thriving local businesses and many well-known multinational conglomerates have set up office there as well.
However, the differences between the two cities are rather significant and quite revealing. These differences ultimately tip the scales for many Hong Kong residents, making Dubai an appealing destination to consider.
Both Dubai and Hong Kong appeal to a broad spectrum of people from around the globe. They offer a little something for everyone, from popular beaches to championship golf courses, musical concerts, sporting events and Michelin-starred dining.
If we consider golf, Hong Kong has a total of 6 golf clubs and 10 golf courses whereas Dubai offers 9 clubs and 13 courses, a number that is expected to grow further over the next few years. Courses in Hong Kong are located in the far outskirts of the city, so you are looking at a drive of 30 to 40 minutes from the city centre to play a few rounds. By comparison, Dubai’s golf courses are spread around the heart of the city, with two clubs being separated by no more than a 15-minute drive from each other.
Hong Kong has always been known for its ports and waterfront attractions such as the popular Victoria Harbour, the Central Promenade, and several parks by the water. Dubai has a long maritime history of its own as a harbour city and a centre of pearl diving. Dubai Creek, which was once one of the city's major ports, is a well-known historic attraction filled with buildings from a bygone area and local street markets. The Creek is slowly being transformed into a key part of the city's future - it has been extended to form the Dubai Canal, which flows through Dubai's busy commercial centre, and the shores of the Creek are the site of Dubai Creek Harbour, a vibrant mixed-use community. Other famous areas of the city include the Dubai Marina district, the man-made Palm Jumeirah island, and the upcoming Dubai Harbour. With new waterfront offerings coming up seemingly every month, Dubai offers a plethora of choice and, in just a few years, will certainly have an edge over Hong Kong in that respect.
When it comes to dining, both cities are once again neck and neck, though Hong Kong does have a slight edge in terms of its home-grown concepts. The city contains several Michelin-starred restaurants helmed by renowned local chefs. Dubai, alas, has no Michelin ranking of its own yet and its local eateries, while popular among residents, have yet to gain global appeal. But Dubai has turned cosmopolitan dining into an art form, attracting Michelin-star talent from across the globe, including Massimo Bottura, Vineet Bhatia, Gordon Ramsay, Tom Aiken, Gary Rhodes and (very soon) Heston Blumenthal and Jose Andres. If you are looking for variety in your cuisine, Dubai certainly has you covered and it has a very strong Far Eastern food culture.
Hong Kong is known for its relatively stable economy in spite of changes in global outlook. However, political tensions simmering over the past year threaten to undermine its status as an investment safe have. Dubai has diversity on its side and, contrary to popular belief, is not an oil-driven economy at all. It is also one of the world’s fastest growing economies and far ahead of Hong Kong’s growth rate according to American research group the Brookings Institution. Even now, after a sharp decline in economic activity in the early spring, business is picking back up and looking at strong improvement heading into the end of summer.
There is also the ease of setting up a business in Dubai, with the whole process from application to the formal opening of a company taking as little as 7 days. As a hub for entrepreneurs, Dubai is always looking to make the process even easier with regulations that get more relaxed every year. The introduction of new visa initiatives, particularly five and ten-year visas for investors and applicants in specific categories, highlights Dubai’s commitment to building a more welcoming and stable home for expats. And innovation is a key part of Dubai's growth strategy, as technology helps to speed up bureaucratic processes. Hong Kong is not just notorious for its red tape and strict barriers for new enterprise, it is also quite expensive, which brings us to our next point.
Cost of Living
A major differentiator between the cities when it comes to lifestyle, and the one factor that would have a considerable impact on the above points, is cost of living. According to global consulting firm Mercer, Hong Kong is the most expensive city in the world to live in, and the cost of living is only expected to grow steeper as a result of the coronavirus. Dubai, meanwhile, does not make the Top 20.
Part of the reason for this disparity is real estate. As ranked by real estate and investment services group CBRE, Hong Kong has the most expensive property market in the world. Especially when it comes to luxury homes, the comparision between cities is staggering. For the price of $1 million, you can buy 1,480 sq ft of real estate in Dubai, compared to a mere 310 sq ft in New York and only 220 sq ft in Hong Kong. For investment, returns in Dubai are also more generous, and you can expect anywhere from double to triple the amount you would get from a comparable investment in Hong Kong.
Taxation is another very key factor. While Hong Kong has a number of different taxes, Dubai is essentially tax-free. At the start of 2018, VAT was implemented in Dubai though at a rate of a flat 5%, it is much lower than what you would find in other major cities and has a very minor impact on cost of living. Even as coronavirus had a sharp impact on the economy recently, Dubai has no plans to increase taxes.
Dubai is one of the safest cities to live in the world. According to global data website Numbeo, in city rankings for 2019, Dubai came in 3rd in terms of overall safety, with Hong Kong at 6th place. With its new ‘smart city’ initiative that has been rolled out over the past few years and a ministry that is solely dedicated to increasing happiness levels in the city, Dubai is looking at a more stable, secure future.
This is the one point where both cities are fairly neck and neck. As a city that is expanding and striving to create a seamless living experience for residents, Dubai is strengthening its infrastructure year on year. Connectivity between key areas of the city is already quite good and new roadways are making travel even smoother. There are two metro lines criss crossing the city with several more planned. And then there are the two major airports - Dubai International Airport and Al Maktoum International Airport - the latter of which is poised to be the largest airport in the world.
Hong Kong also houses one of the busiest airports in the world and is quite renowned for its public transportation system and easy travel across the city.
When combined with all of the other factors, however, Dubai is a clear winner, especially for investors and entrepreneurs from Hong Kong who are looking to the city as part of their future plans.
Torno Subito image courtesy of W Dubai - The Palm official website.