UAE – The 2018 Global Real Estate Outlook Report (GREO Report), by full service property investment company IP Global, has shown that while London has long attracted property investors from the Middle East, regional cities in the UK and cities within Central Europe are now offering UAE residents a compelling global investment choice. The report also highlights that many investors from the region are looking to purchase property in the United States and Thailand.
The GREO Report is an annual report published by IP Global which identifies property investment opportunities across different international markets. The report reviews the growth potential of the world's different property markets and identifies cities that IP Global plans to invest in, explore and investigate further. The GREO Report then provides insight on viability, performance and future potential of cities throughout the world, which helps property investors choose their future property investment locations.
Richard Bradstock, Director and Head of the Middle East at IP Global commented, “Over the years we have seen that, historically, investors from the Middle East have favoured buying property in London. However, in 2017, we witnessed a behaviour shift as many investors are flocking to buy more affordable property in northern cities like Manchester, Liverpool and Leeds, which offer high rental yields and rising house prices. Internationally, with the launch of start-ups and technology hubs, central European cities like Berlin, Frankfurt and Lisbon have become attractive investment destinations due to their resulting strong capital growth and sound economic performance.“
“Our recent YouGov study also showed that America remains a popular choice for UAE residents. Seattle is a city we are exploring as its booming tech industry and growing economy has made it an ideal investment location. On the other hand, looking East, Bangkok, with its strategic location and thriving tourism industry, is a location we are looking to invest due to its massive growth in the real estate sector appealing to investors from the region.”
According to the 2018 report, Manchester has shown the greatest promise. The city boasts the largest development plans and highest GVA (Gross Value Added) at GBP 16.1 billion of the six UK cities within the Northern Powerhouse scheme. With rapid population growth and a chronic housing shortage, , property prices are rising, with an 8.6% increase recorded from Oct 2016-Oct 2017, over double the 4.2% national average, and rents are forecast to significantly increase to 17.9% from 2018 to 2022.
Middle Eastern property investors searching for secure income streams outside London property are also currently exploring Leeds. Leeds is the UK’s second largest economy and generates 5% of the country’s economic output. With a population of 65,000 students driving demand, combined with the supply shortfall of 30,000 units per year, rental yields are forecast to rise by 17.5%% between 2018 and 2021, making Leeds a prime investment opportunity.
Across Europe, Berlin continues to present itself as a prosperous market for property investors for both domestic and foreign buyers. Within the city, there is a huge demand for both rental and private property meaning that house and apartment prices increased by 10% year-on-year in 2017. With the population predicted to grow by 400,000 by 2030, Berlin requires an additional 20,000 new unit completions per year, and with yet with annual completions only reaching 12,000 and 15,000 units for 2017, this supply and demand imbalance looks set to remain for the foreseeable future.
Investors are also currently exploring Lisbon as the Portugese economy has significantly expanded in 2017. The recent introduction of government policies, including the Golden Visa Program, the Non-Habitual Tax Regime and New Lease Law, have played a substantial role in boosting the city’s real estate market. In 2017 house prices increased by over 19%, and the five-year capital growth in the city stands at an impressive rate of 63% from 2012 to 2017. JLL predicts the residential market in Lisbon will generate a further capital appreciation of 19.2% and another 27.3% rental growth over 2018-2022. Due to this positive economic outlook, Lisbon is becoming a top choice for investors.
According to IP Global’s annual YouGov survey, 20% of UAE residents consider purchasing property in the United States. In particular, Seattle is a key market for IP Global as it is becoming one of the fastest growing cities in the US, with a 3.1% annual population growth rate in 2016. This growth spurt has been caused by the thriving tech market attracting young talent who are looking to settle in the city, meaning that Seattle has achieved the fasting growing home prices in the US. Furthermore, in the last year a 15% tax was imposed on foreign property buyers in Vancouver, ensuring the UAE investors are choosing to invest in the US instead. As a result of strong demand from both young professionals and international buyers, Seattle saw a 12.7% price increase in 2017 and an impressive 62.7% increase over the past 5 years.
With 6 offices throughout the world, IP Global caters to a wide audience of investors. In the last five years, more Chinese investors have began to enter the market as they prefer to invest in overseas property due to both the high domestic property prices and the high cost of living. With sound economic foundations and fast growing tourism industry, the Bangkok residential market has witnessed a strong demand from both domestic and foreign buyers, of which Mainland Chinese buyers dominate the market. This high demand has placed an upward pressure on house prices and has led to 16% growth in the past 5 years. Furthermore, the extension of mass flight transit routes in Bangkok will put an added pressure on future house prices with Knight Frank forecasting property value to increase between 5-7% in 2018.
The Global Real Estate Outlook by IP Global can be accessed here.
About IP Global
IP Global is an end-to-end property investment company with offices in London, Cape Town, Dubai, Abu Dhabi, Kuala Lumpur, Singapore, Hong Kong and Shanghai. Since our establishment in 2006 we have directed over USD2.3 billion of investment across 30 markets worldwide. Our mission is to change the way the world sees property investment, putting it on a level footing with any other globally recognized asset class. Visit www.ipglobal-ltd.com for more information.
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© Press Release 2018