Investors return to UAE real estate, says survey

Property re-emerges as preferred asset class, says Friends Provident investor attitudes report

Real estate is re-emerging as a preferred asset class among UAE investors, Friends Provident International has said in a new report.

The latest Friends Provident International (FPI) Investor Attitudes Report said the preference for investing in property now stands at its highest ever level, with a score of 17 - having started at -2 in the initial wave of research in Q2 2010.

Property prices in Dubai soared after the city opened its real estate sector to foreign investors in 2002, granting them freehold ownership rights at many developments.

But house prices in Dubai suffered the biggest reversal seen in the Gulf property market as a result of the financial crisis, declining on average by about 60 percent.

The report also showed that UAE investors are failing to take appropriate professional financial advice when planning their investments.

The report shows that almost half (44 percent) of respondents have never sought advice on financial planning from a UAE based financial adviser or insurance broker.

The report shows that an even higher proportion of respondents (47 percent) do not have any life and/or critical illness cover in place, whether provided by their employer or arranged personally.

Matthew Waterfield, general manager, Middle East & Africa at Friends Provident International said: "It is pleasing to see the improvement in the preference for investing in property - both in theory and in practice.

"This, coupled with the reduced number of respondents choosing to sit out on investing, and the improved sentiment towards the current and future markets, is a clear indication of an overall improvement in investor confidence in the UAE market."

Research giant Oxford Business Group (OBG) said on Tuesday that Dubai’s property crash was over, with the residential sector having “posted solid growth over the past few months".

In an article to be published in Arabian Business magazine, OBG regional editor Oliver Cornock added that “other areas of the sector are also showing signs that recent declines are beginning to reverse".

Overall, the Friends Provident investor attitudes index for the UAE remained stable at 15 points, just three points below its highest ever level.

"The stability in the Friends Investor Attitudes Index for the UAE reflects the growing confidence among UAE investors in their local market," added Waterfield.

"Unlike Hong Kong and Singapore - where both the index and investor sentiment seems to fluctuate from wave to wave of research - UAE investors generally are demonstrating a balanced, longer term approach to their investment planning, and do not appear unduly worried about short term market fluctuations."

He added: "I am however concerned that a large proportion of UAE investors do not take suitable professional financial advice and this finding is reaffirmed by the fact that so few respondents have life cover, or cover against critical illness, in place."

The preference for investing in collectibles has also rebounded to 7; having dropped to a low of just 2 in the previous period.

Confidence in both the current and future UAE investment market has improved significantly, with 44 percent of respondents viewing the current market as an improvement on the market six months ago.

Only 16 percent of respondents think that the current market is worse than six months ago - again the lowest since research began.

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Posted by: Andy

Article states that propert prices crashed in Duai due to financial crisis which is false. They fell due to local rules,regulations,high community/association fees and fact that that they did not give buyer and their immediate family members residency which was told to buyers at beginning so everyone sold at the end upon finding out all the surprises when units were being handed over. Let's not distort real facts of why real estate market in Dubai crashed by blaming it on the international financial crisis.

Posted by: Vicky

I would like to take exception to the statement "report shows that UAE investors are failing to take appropriate professional financial advice". I have learnt with personal experience that the 'professional advice' is not available any way. If at all available in some form, it is incompetent, ill-informed, devoid of fundamentals and geared to rip you off without any scruples. Lack of consumer protection mechanism is a perfect breeding ground for consulting practices which are designed to lead you to the gorge, you footing an attrocious management fee for your own disaster story. Advisors are no angels of mercy anywhere in the world and out here they go up a few notches. No surprise at all that the consumer is safer using one's own better judgement.

Posted by: Dunhill

Only "stupid investors" can trust the real estate market in Dubai again! Why harshly saying "stupid"? Because if you do not learn from harsh lessons then you are bound to be stupid! The real problem is not the RE market depression, which is the case in most of more advanced countries, but rather the lack of transparency, understanding and willingness to take steps for recovery and support. Current buyers from certain countries have one aim: getting an access outside their own countries in form of visas or tax-free investments or even hiding their assets. Buying a property in Dubai is a breathing space from them which cannot and will not be considered as a sustainable investment. Therefore, Dubai RE market will continue its current unstable status.

Posted by: max


Posted by: mama

very well said Dunhill

Posted by: Benny Hill

agree with this statement.

Posted by: steve

For the past 2 years I keep reading same report of property prices
in Dubai are going up and it is a great time to invest. Guess
what, it keeps going down because supplies exceed demand and
it is still above actual value. Do not be fool of these marketing
reports. At best, the property market will be leveled to actual
value which we still above that mark.

Posted by: Andy

Only a new fool will believe these reports. Those newbies that just came to Dubai from neighboring countries that have problems. These reports are timed to hit the news media and to target newbies with money that they left their country with so that they can buy real estate in Dubai.

Posted by: mama

NRI are out there in the Indian Property show and almost all of them have the first target of investing money in property back home. and on the other hand majority of property buyers here are Indians and Iranians, so if Indians are going back home and Iranian currency is flatted, then who is buying the property here?

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