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.