- 21% of UAE adults would consider US for property investment
- 13% have money invested in property abroad
- 41% identified tax understanding as a key barrier
UAE, 24 February 2016 – The US, UK, Australia, Singapore and Germany are the top five destinations for UAE residents looking to invest in property overseas, according to a YouGov survey commissioned by IP Global, a leading full-service property investment company.
When asked where they would consider investing in property abroad, the US topped the list, with 21%* saying they would consider investing there. The UK with 19%, and Australia with 16%, were the second and third most popular choices respectively. Singapore and Germany rounded out the top five, with 13% of respondents choosing these countries as preferred investment destinations.
The UAE was one of five countries where the survey was conducted, as part of IP Global’s research to identify investment trends in real estate across key markets. Hong Kong, Singapore, the UK, and South Africa were the other four countries. The results across the five markets highlighted the following trends:
- The US is among the top investment destinations for respondents outside of Asia.
- Germany is in the top five choices for investors in both the UK and UAE.
- Australia is amongst the top three investment markets for real estate in all five countries.
When it comes to selecting assets to invest in, property in the UAE was the most popular asset class for UAE investors. More UAE residents currently invest in property (42%) than stocks, shares or bonds (30%), underlining the continued appeal of real estate as an asset class that provides stable returns.
The survey of more than 1000 UAE adults found that 41% of respondents identified tax as a reason that would prevent them from investing in property assets overseas. 33% of respondents said a lack of understanding of foreign laws in the country where property is located is also an investment obstacle.
Richard Bradstock, Director and Head of the Middle East at IP Global, said:
“As the results show, the US has proved the most popular market for UAE potential investors. This shouldn’t come as a surprise as both Miami and Chicago offer great potential for investors. Miami has achieved its second consecutive year of over 20% house price appreciation, and Chicago offers average yields of 7.9% according to Zillow.”
“The UK has always been a popular market to invest in, but outer London and regional cities such as Manchester and Birmingham, due to their robust economies and growth opportunities, have definitely seen increased attention from foreign investors. According to JLL, Manchester prices are forecast to grow 26.4% between 2016-2020, presenting incredible potential for investors.”
“At IP Global, we have also noticed a growing interest in Germany as UAE residents recognise the extraordinary value that cities such as Berlin have. For example, in 2015 the median property price increase in Berlin was 18.5% according to CBRE.”
“Although many UAE citizens are experienced investors, the results have revealed a large gap in international property investment understanding. There is still a lot of room for overseas property to increase in popularity as an asset class, especially as volatile global financial markets hold sway.”
This year’s results are consistent with a YouGov survey conducted in 2014 which found London, New York and Sydney to be the most popular cities to invest in outside of the UAE.
% of population with investments (all assets)
|
% invested in Property abroad
|
Top three investment assets
|
Top three countries for investment
|
Top three reasons not to invest
| |
UK
|
32%
|
2%
|
Stocks/shares/bonds – 20%
Property in home country – 11%
Art/antiques – 2%
|
USA – 14%
Australia – 12%
Germany – 7%
|
Not understanding laws abroad – 50%
Not understanding market abroad – 50%
Managing tenants from abroad – 40%
|
UAE
|
74%
|
13%
|
Property in home country – 42%
Stocks/shares/bonds – 30%
Property abroad – 13%
|
USA – 21%
UK – 19%
Australia – 16%
|
Tax considerations – 41%
Not understanding laws abroad – 33%
Difficulty of finding trustworthy managing agent – 32%
|
Singapore
|
68%
|
8%
|
Stocks/shares/bonds – 49%
Property in home country – 26%
Foreign exchange products – 10%
|
Australia – 32%
UK – 16%
Japan – 13%
|
Not understanding laws abroad – 54%
Not understanding market abroad – 52%
Tax considerations – 51%
|
Hong Kong
|
78%
|
7%
|
Stocks/shares/bonds – 67%
Foreign exchange products – 25%
Property in home country – 12%
|
Japan – 26%
Australia – 17%
UK – 15%
|
Not understanding laws abroad – 45%
Not understanding market abroad – 44%
Managing tenants from abroad – 44%
|
South Africa
|
55%
|
3%
|
Property in home country – 28%
Stocks/shares/bonds – 25%
Foreign exchange products – 8%
|
UK – 36%
USA – 34%
Australia – 29%
|
Costs involved in foreign transactions – 47%
Tax considerations – 46%
Currency fluctuations – 44%
|
