According to the annual YouGov survey conducted by IP Global, the leading full-service property investment company, 58% of UAE residents are planning to invest in property either locally or overseas in the next year. For the fourth year running, property remained the most popular type of investment asset, underlining the continued appeal of real estate, due to the stable, reliable returns it offers.
This year, IP Global’s YouGov survey of 1000 UAE residents went further to understand the needs of the public, reviewing their investing preferences, behaviour and motivation, while also exploring the markets they wished to invest.
Richard Bradstock, Director and Head of the Middle East at IP Global, said: ‘This year we have felt investor confidence has returned after the impact of Brexit and the US Election. In fact, from our global study, UAE residents have the strongest appetite to invest in overseas property (14%) in comparison to citizens from Hong Kong, South Africa and the UK. At IP Global, we are continuing to invest in mature, low-risk Western destinations such as Germany and the UK. However, what has changed recently is that whereas previously our customers were looking to purchase one high-value property in a capital city, they are now looking to instead divide the funds and diversify their portfolio, purchasing two properties in tier 2 cities, that offer more affordability and higher growth rates.’ When choosing the particular location for this future investment, 39% of UAE residents are planning to invest in property in their home country, 26% are hoping to acquire housing in their country of residence and 14% are looking to purchase assets overseas.
When asked what the main motivations for UAE residents were, when investing in overseas property, the most frequent responses were future living accommodation (48%), to produce funds for retirement and their children’s education (46%) and, lastly, capital gains (39%).
However, while obtaining property abroad can lead to substantial high rental yields and capital gains, IP Global acknowledges that some of the UAE residents may feel hesitant. Therefore, the YouGov study raised this topic and found that the three main reasons that prevent UAE residents from investing overseas are a lack of understanding of overseas property markets (32%), a lack of understanding of the laws/regulations of overseas property markets (31%) and tax considerations (28%).
The YouGov study also provided some interesting facts about UAE residents demographics with the participants being divided into Emiratis, Arab Expats, Westerners, Asians and Other. For example, Emiratis are the least likely of all nationalities to currently own property in their home country, whereas Westerners are most like to own property abroad currently and are looking to buy assets abroad in the next twelve months.
In the future, Asians are most likely to buy property in their home country. When investing abroad, the location that UAE residents plan to invest can also be divided into demographic, as the majority of Emiratis (31%) and Asians (23%) prefer America, whereas Arab Expats are divided between the USA (18%) and the UK (18%). In comparison, the UK remains the favourite location for Westerners (34%) to invest.
Similarly, the main motivation for investing in property changes depending on your demographic: most Emiratis were looking for pure capital gains (55%), Arab Expats wanted future living accommodation (50%) and most Asians planned to invest to earn funds for retirement and their children’s education.
However, Westerners had three incentives: living accommodation (43%), resources for retirement and their children’s education and a monthly rental income.
In comparison to last year’s study, more residents are looking to invest in property at home or abroad in 2018, whereas the chosen locations have shifted from Canada, USA and the UK in 2017 to USA, UK and Australia in 2018.
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