As investor confidence returns, 58% of UAE residents plan to invest in property in the next 12 months

About 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 Middle East head at IP Global.

“From our 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.

The UAE property market has struggled, 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 yearon-year in value in the first half of the year, according to data from Dubai Land Department.

A July report from 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 government’s new five-year retiree visa, which allows those over the age of 55 to stay in the UAE, takes effect.

Lynnette Abad, 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 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.

Forty-six 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.

The YouGov study also found different attitudes towards property investment.

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.