By Andy Sambidge
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.
These reports as FPI are a dime a dozen. One can come out with his own report tomorrow saying RE in timbuktu is absolutely booming. Its sort of like the titanic after it sank. Some people in the water freezing kept saying the life boats were just about to come back, the rest died gracefully. This report is like the former.
This report seems like an ad to sell life insurance and cic.
Fpi , please go back to the uk and mis sell your products there.
Thank you very much.
fully agree with you Ehab. no report will change anything. people learned the lesson and would not invest a penny unless it is money collected the easy way.
Obviously nobody involved in the preparation of the report has had their pool drained recently!
The vast majority of companies selling investment advice, sell insurance based products designed to take maximum commission.
I needed my money back and was told >>>>there is nothing to pay out...we told you it was a long term savings plan....not a few years..
Well I found out that these salesmen get commission of 125% of your first years premium....that is why there is nothing in the pot. Even after 5 years you only get about 75% of what you have paid in...
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?
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.
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.
agree with this statement.
very well said Dunhill