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Newsletter 05/2017

Finance | Property investment insights

 

IP Global Commissioned Study Reveals Property Investment Preferences of UAE Residents

An annual survey by property investment firm IP Global and YouGov has found that when it comes to selecting assets to invest in, 13% of UAE residents have plans to invest in property overseas in the next year, whereas 33% of UAE residents would invest in property in their home country. In total, 21% would invest in stocks, shares or bonds. Regardless of location, the results underline the continued appeal of real estate as an investment, in part due to the stable, reliable returns it offers.

The UAE was one of five countries, including Hong Kong, Singapore, China and the UK, where the survey was carried out. The results across the five markets showed that the UAE had the highest percentage of people planning to invest in property abroad in the next 12 months.

Richard Bradstock, Director and Head of the Middle East at IP Global, said: “Although many UAE citizens are experienced investors, the survey results have revealed a huge gap in international property investment understanding. We believe there is still room for overseas property to increase in popularity as a strengthening US dollar, combined with a post-Brexit world and the recent announcement of another British election in June, makes it cheaper for USD pegged investors to buy property abroad. This window of opportunity will give UAE investors the chance to capitalize on investing abroad, especially in the UK market.”

When asked what advice he would give to those UAE residents looking to invest either in their native countries or abroad, Richard said:

“The key benefits of property are stability, reliability, diversification and low correlation with other major asset classes. But choosing the right property, and in fact the right market, is crucial. At IP Global, when we review the potential of a new investment opportunity, we use the PIE acronym: population growth, infrastructure and economy. Berlin is a great example of how when a population grows in an area so does the demand for dwellings. Similarly locations such as Birmingham have demonstrated how regeneration and infrastructure investment is linked to rising population density. In terms of economy, one that is stable and robust with growing employment levels makes for the perfect medium to long-term investment.”

When reviewing preferred investment locations, the YouGov study, which polled 1000 UAE adults, found that North America, UK, Germany and Australia remain the top property investment destinations for UAE residents. In order, North America is the most popular market among UAE citizens whereas the UK and Australia were the third and fourth most popular choices respectively. Germany rounded out the top five, with 10% of respondents choosing the country as a preferred investment destination.

Commenting on the results, Richard said: “As the results show, North America continues to be a popular investment market for UAE residents. This shouldn’t come as a surprise as Chicago offers some of the world’s highest average yields for a global city at 7.9%, while Los Angeles condominium prices were up 7% year on year to December.

“Beyond North America, the UK has always been a popular market to invest in, but outer London and regional cities such as Manchester, Birmingham and Liverpool have become firm favourites due to their strong economies and growing demand. In Liverpool, for example, prices rose 6% during June to September 2016. We believe this demand is likely to rise further as the population of Liverpool is predicted to grow from 484,021 to 1.6 million by 2040.”

“We have also noticed significant interest in Berlin among UAE investors. With a 40% housing supply deficit and 400,000 new residents expected by 2030, the German capital continues to hold its reputation as one of Europe’s prime destinations for residential property investment.”

Interestingly, investing is no longer a domain dominated by men. The YouGov survey also revealed that 64% of women in the UAE plan to invest in property in the next 12 months, compared to 74% of men.

For those 13% of UAE residents looking to purchase property overseas, this can be a very daunting task. Despite the UAE’s geographically central location, it can be difficult when your investment is thousands of miles away. Typically, each country has different jurisdictions and tax regulations, which vary depending on your visa or residential status. Therefore, it’s best to seek the advice from property experts, lawyers and tax advisors. The role of IP Global, as a full-service property investment company, is to deliver well-researched, reliable investment opportunities that can help buyers with every part of the process from sourcing the property to renting or re-selling.

For more information or advice please contact Lizzie Hodkinson on lizzie.hodkinson@ipglobal-ltd.com  or visit IP Global’s website: www.ipglobal-ltd.com

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