58% of UAE residents plan to invest in property in the next 12 months

A new poll found most investors are eyeing a purchase in their home country with the Emirates the next preferred location

Flamingo Villas units developed by RAK Properties within the Mina Al Arab community. Courtesy RAK Properties

Around six in 10 UAE residents plan to invest in property in the UAE or overseas, making real estate the most popular investment class, a new survey found.

Fifty-eight per cent are keen on investing in real estate in the next year – an increase on last year’s study, with the United States, United Kingdom and Australia the most popular locations, according to a YouGov poll of 1,000 residents from property investment company IP Global.

Investor confidence has returned after the impact of Brexit and the US election, said Richard Bradstock, director and head of the Middle East at IP Global.

“In fact, from our global study, UAE residents have the strongest appetite to invest in overseas property (14 per cent) in comparison to citizens from Hong Kong, South Africa and the UK," he said.

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The UAE property market has struggled in 2018 with S&P Global Ratings estimating earlier this year that prices in Dubai, the country's largest real estate market, could slip 10 to 15 per cent over the next two years. Dubai property market transactions fell 16 per cent year-on-year in value in the first half of the year, according to data from Dubai Land Department. Another July report from property consultancy Chestertons found that apartment and villa rents fell 3 per cent and 1 per cent in Abu Dhabi, respectively, in the second quarter of the year.

However, property experts expect a surge in new business from older residents as the UAE Government's new five-year retiree visa unveiled last week, which allows those over the age of 55 to stay in the UAE, takes effect. Lynnette Abad, the director of research and data at real estate portal Propertyfinder.com, expects the number of end users to rise as residents look to qualify for the visa with one of the criteria of an investment property worth at least Dh2 million.

Despite the softening UAE market, IP Global says a quarter of those polled hope to acquire housing in the Emirates, while four in 10 plan a purchase in their home country.

Reasons for investing overseas include securing future living accommodation for half of those polled, while 46 per cent hope the investment will produce funds for retirement and their children’s education and 39 per cent are focused on achieving capital gains.

However, not everyone is on board with the idea of property investment, with some respondents hesitant. Reasons for this include a lack of understanding of the laws and regulations of overseas property markets and tax considerations, said IP Global.

The YouGov study also found different attitudes to property investment between nationalities. While Emirati investors were focused on pure capital gains, Arab residents were looking for future living accommodation and Asians planned to invest to earn funds for retirement and their children’s education. Westerners had three incentives: living accommodation, resources for retirement and their children’s education and a monthly rental income.