Property remains preferred 2018 investment asset for UAE residents
The annual YouGov survey conducted by IP Global, a leading full-service property investment company, has confirmed that property remains the preferred investment asset by UAE residents, with 40 per cent of residents planning to invest in property in the UAE and 18 per cent planning to do so overseas in the next year.
In a biannual study taken by 1000 people, when choosing which asset type to purchase, property ranked above stocks, shares or bonds (27 per cent), highlighting the continuous appeal of real estate, possibly due to the stable, reliable returns it offers. Despite the recent political global events, the latest YouGov study also showed a seven per cent increase in appetite by UAE residents in the last six months for property investment.
When UAE residents were asked where they would consider purchasing property abroad, Canada (20 per cent) and the USA (20 per cent) were the most popular countries selected from the list. The UK with 15 per cent, plus Germany and Australia with 12 per cent each completed the top five preferred investment destinations.
In terms of demographics the YouGov study showed that there is no longer a gender divide, as whereas property investment had previously been seen as a male pursuit, now a similar percentage of women are looking to purchase assets. For example, in 2018, 41 per cent of females are considering buying property in their home country in comparison to 39 per cent of men. However, women still slightly lag behind in regard to overseas investment, as 14 per cent of females are looking to purchase property abroad in relation to 20 per cent of men.
Richard Bradstock, Director and Head of the Middle East at IP Global, said the results of the second YouGov study are extremely positive and indicate that more and more UAE residents are looking to purchase property in the next 12 months.
“On a global level, property continues to offer excellent prospects for capital growth. For example, North America continues to be an attractive market for the UAE residents, due to the impressive returns it offers investors, as shown by Chicago which has experienced an 36 per cent increase in house prices in the last five years while rental yields have increased 10 per cent between 2016-2017,” said Bradstock.
He added that as the most mature market in Europe, the UK has always been popular with overseas investors. London, due to its chronic housing deficit and the government’s increased spending on infrastructure, remains a solid investment choice. However, recently we have also seen a change in buyer behaviour. UAE residents are now looking beyond Central London for more affordable properties in regional cities such as Birmingham, Manchester and Liverpool. Of note, Manchester has caught the eye of investors as house prices have risen 25 per cent in the last five years with rents forecast to increase 20.5 per cent from 2017 to 2021.
“Within Europe, Berlin’s recent economic boom and population influx mean that the German capital is being viewed as a span style=”font-size: small;”>promising destination for property investment. With a current 40 per cent housing deficit, Berlin’s rental market is strong, with between 5.1 per cent and 6.9 per cent rental growth in the past three years, and approximately 6 per cent in 2016 (5). On a whole, Germany is the perfect investment opportunity for UAE residents, as overseas investors do not have to pay any capital gains tax for properties owned for more than ten years. Overall, we are delighted that the YouGov study has shown the increased appetite of the UAE residents for property investment and in the current market, with a weak pound making it cheaper for USD pegged investors to buy property abroad, real estate is calling out: the time is now,” said Bradstock.