The UAE has the best property investment prospects outside the United States, according to a new report from Savills.
The findings came after a raft of other data showing further weakening in the housing market.
The study was released ahead of the annual Cityscape Global real estate convention, which opens in Dubai today. Investors at the convention will be looking for signs of a recovery in a market that has recorded steep declines in both prices and transactions this year.
Savills ranked the UAE as the second-best market in the world for investors in residential property.
The firm’s new World Residential Investability Ranking rates the UAE just below the United States and just above Singapore and the UK based on economic growth and market recovery.
The report also places Dubai as the top city outside of the US for investors based on its five-year prognosis for the residential market.
Savills said its study ranked 14 countries and their major cities and resorts that have consistently attracted investor interest in recent years.
It said that residential values in Dubai dropped in the first half of this year by 7.7 per cent and transaction volumes slowed “amid a wave of new supply and a fall in speculative investment”.
David Godchaux, the chief executive of Core Savills, argued that this softening of the market presented a buying opportunity ahead of a likely rebound in Dubai’s property sector as activity increases in the run-up to 2020.
“The property market has matured a great deal after the government took measures to stamp out short-term speculators,” he said. “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 buyers from the region and beyond.”
Separate research released yesterday from HSBC also suggested that some recent warnings about the UAE real estate market had been overblown.
The possible removal of sanctions in Iran could boost demand for UAE property, according to the bank.
The US emerged as the clear winner among global property markets in the Savills report, but the broker warned that local markets varied widely.
“There is a world of difference within the USA between top tech cities and languishing Rust Belt ones,” said Yolande Barnes, the director of Savills world research.
Savills placed San Francisco, Miami, New York and Los Angeles at the top of its rankings. Dubai came next, supported by positive factors such as domestic wealth creation and population growth.
A YouGov survey published yesterday revealed that more than half of UAE investors surveyed were more interested in residential projects than other types of property.
Speaking at a panel debate during the conference, Tim Rose, head of real estate at Emirates NBD Asset Management, said that he could see developing interest from institutional investors in affordable properties for staff members where buildings are let by a single client such as an education provider or a hospitality firm.
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