UAE investors are building property into their portfolio

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  • 49% of UAE investors expect property to perform strongly over the next five years
  • Most investors hold a low risk or balanced investment portfolio
  • 27% consider preservation of capital fundamental to their investment planning

The latest Friends Provident International (FPI) Investor Attitudes report has revealed that UAE investors now consider property second only to gold as their preferred asset class. Almost half (49%) of respondents expect the property market to perform strongly over the next five years and a further 11% expect “very strong” growth over the same period. Just 10% of respondents expect to see some weakness in the property market in the next five years.

The report, compiled from a survey of wealthy, UAE-based expatriate respondents, shows that – on balance – investors believe the investment market has improved over the last six months, and that there is strong sentiment that markets will continue to improve over the next six months.

The Friends Investor Attitudes Index for the UAE now stands at 17 points – an increase of two points on the previous wave of research which was based on a nationally representative demographic sample, conducted in June 2012.

This is the first edition of the revised Investor Attitudes Report and follows eight previous waves of research, covering a period of more than two years. The surveys are conducted simultaneously in FPI’s three principal markets, Hong Kong, Singapore and the UAE. The survey has been changed slightly from previous waves, in order to focus on wealthier investors in these markets. In the UAE, wealthier investors are defined as having USD4,000 per month disposable income and/or a lump sum of USD100,000 to invest.

Looking more closely at the survey results, the most popular investment strategies for UAE based investors are to either take a low risk approach to investing (29%) or to hold a balanced investment portfolio (34%).

Matthew Waterfield, FPI’s General Manager, Middle East and Africa said:”The revised income levels and demographics of the respondents for the latest FPI Investor Attitudes Report show some interesting results. The increased preference for investing in property is not surprising as the UAE continues to recover from the financial downturn. This is a sign of confidence returning to the local market.”

Of the three regions surveyed, UAE investors consider preservation of their capital a fundamental aspect of their investment planning, with 27% of respondents unlikely to invest in anything other a guaranteed product. Just 1% of Hong Kong investors and 12% in Singapore would adopt a similar approach.

Matthew Waterfield commented:”The reduction in the number of respondents holding cash is probably because we are now surveying wealthier investors, who tend to adopt a more sophisticated approach to their investments. Considering 68% of UAE respondents are Non-resident Indian, it is not surprising that the survey shows that UAE investors overall adopt a more cautious and considered approach to their financial planning than their counterparts in Hong Kong and Singapore, who appear more willing to take a speculative approach to investing.”

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