Dubai is the second most attractive real estate investment market in the world for high net-worth individuals (HNWI), a new report has said.
Wealthy investors only choose London ahead of Dubai, according to Cluttons in its International Private Capital Survey 2013/14.
The survey of seeks to draw out the appetite for international real estate investment and unpick the underlying drivers behind the intentions as an indicator of future trends in capital allocation.
The findings showed that Dubai has risen to second place behind London as the go-to real estate investment destination for HNWI according to the results of a survey of 461 HNWI from around the world.
Cluttons said: "Last year's results suggested that global HNWI would seek out investment locations closer to home markets as the world economy began its journey back towards a meaningful recovery. Cluttons has seen this come through in the results of this year's survey, with Dubai in particular rising sharply in the minds of the region's HNWI.
According to the results, those from the Middle East now prefer Dubai to London, with Cluttons' offices in Manama and Muscat reporting capital value growth, the emirate's perceived status as a safe haven and relatively high yielding residential property as the top three pull factors influencing HNWI.
Among Dubai's top three factors drawing the attention of HNWI, the lifestyle on offer in Dubai through the ownership of a second home and the security offered through real estate investments in the Gulf city rank behind the emirate's lure as a place to expand investment portfolios, the survey said.
Steven Morgan, head of Cluttons Middle East, said: "It was unsurprising to see Dubai re-emerge as the region's top investment pick given the current economic resurgence. However we expect the IMF estimate to be bettered, particularly as Dubai's real estate sector continues to recover, adding further momentum to overall growth."
Average residential prices in Dubai have risen by about 30 percent in the past year, aided in part by cheaper debt financing and those looking to avoid escalating rents.
"Furthermore, increased regulations and clear efforts being made by the government to regulate the market signal the desire to ensure that we do not hastily enter another unsustainable growth cycle," said Morgan.
"Average residential values are still trading nearly a third below the peak of the market, so we welcome the introduction of measures at this stage to help keep growth in check," he added.