By Courtney Trenwith
Maturing real estate market makes it a stronger investment opportunity but the current high prices keep it from number one position, says Savills
The UAE is the second best country globally for residential investment, according to international real estate advisor Savills’ new rankings.
The US tops the list, while Singapore comes in third, on the basis of their economic growth and market recovery.
The UAE’s domestic wealth creation and growing population and regional demand make it a wise investment choice, the real estate advisor said.
The report said while the Dubai market had seen more robust demand replace speculative overseas investment that had been common in the past, the emirate was still too close to the top of the present cycle to rank number one for investability.
David Godchaux, CEO of Core, the UAE associate of Savills, said the current softening of Dubai’s residential prices offered investors a good opportunity to buy into a market with strong growth potential over the next five years.
“We expect prices in Dubai to rebound in 2016 as the UAE gears up for Expo 2020,” he said.
“The property market has matured a great deal after the government took measures to stamp out short-term speculators. We are confident that investors looking for long-term gains will do well as Dubai is a safe and established global business centre in the Middle East which has broad appeal to a range of buyers from the region and far beyond.”
The Savills World Residential Investability Ranking assess 14 countries with cities and resort locations that have consistently attracted investor interest in recent years. It considers their broad economic and demographic factors, as well as key demand variables such as population growth, wealth and economic growth and supply and price levels.
The US was “a clear number one”, with San Francisco the star, on the basis of economic growth and market recovery potential.
However, Savills warned local considerations also needed to be taken into account.
“There is a world of difference within the US between top tech cities and languishing rustbelt ones,” director of Savills world research Yolande Barnes said.
The rest of the list was made up by the UK (4) Spain, Caribbean, Australia, Portugal, Italy, France, China, Hong Kong, South Africa and Switzerland.