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Dubai - The Destination of Choice for Buyers from Hong KongOctober 17, 2019
Dubai has often shared the global spotlight with other major metropolises such as Singapore and Hong Kong, and often draws comparisons to the latter. The emirate has now become a major focus for residents of Hong Kong, who are seeking a lifestyle quite similar to what they’re familiar with. What similarities does Dubai have to Hong Kong, and what makes it a more viable option as both a principal residence and an investment?
The similarities are easy enough to see. 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 international companies have set up office there as well.
However, the differences between the two cities are fairly significant and quite revealing. These are the most important factors to consider, and which make Dubai an appealing destination for Hong Kong expats.
In terms of lifestyle, both cities have many similarities as well. 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 is a longtime waterfront destination with areas such as Victoria Harbour the Central Promenade and several parks. Dubai has a rich maritime history with popular trading ports such as Dubai Creek and Jebel Ali Port, which have given way to newer areas like Dubai Marina, the man-made Palm Jumeirah and the upcoming Dubai Creek Harbour. That being said, Dubai’s waterfront offerings are growing more numerous by the day, with the redevelopment of existing areas and the construction of new islands and offshore destinations. It can be a tough choice, but in a few years’ time, Dubai may just have the edge.
For dining, Hong Kong has a slight leg up in terms of pedigree. The city contains several Michelin-starred restaurants helmed by renowned local chefs. Dubai, alas, has no Michelin ranking of its own yet, but has attracted 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. 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.
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. 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 various estimates, the cost of living in Hong Kong is higher than that of Dubai by as much as 25% and a report released by the Economist Intelligence Unit has placed Hong Kong in a three-way tie for the most expensive city to live in the world. Dubai doesn’t make the top ten.
When it comes to real estate, Dubai is a much better option for home buyers and investors. For the price of $1 million, you can buy a piece of luxury real estate in Dubai measuring 1,480 sq ft, compared to a mere 220 sq ft in Hong Kong or 310 sq ft in New York. For investment, returns in Dubai are also more generous, and you can expect anywhere from double to triple the amount you would get from real estate 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.
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.