Continuing fluctuations across global stock and commodities markets have meant thatfor investors looking for steady returns.
In the second of three Market Updates, we reveal the results of our recent YouGov survey, which asked 6,000 adults across the UK, South Africa, United Arab Emirates, Singapore and Hong Kong, which countries they are hoping to invest in in 2016. Don’t miss our first Market Update which uncovered
Findings showed a number of trends common across all regions. Australia is amongst the top three investment targets in all five countries, with the UK among the top three target markets for respondents in four countries. Germany is also in the top four choices for investors in both the UK and UAE. For respondents outside Asia the US is consistently among the top three investment markets, while for Asian investors, Japan remains popular.
As discussed in our, Hong Kong is home to more investors than any other major global market with 77% holding investment assets. For those that would invest in property abroad, Japan is the top choice favoured by 26%, followed by Australia (17%) and the UK (15%).
All safe-haven markets, attractive to investors for their political stability, strong rule of law and ease of access, the results were not a surprise to Jonathan Gordon, Director, IP Global. “Japan, Australia and the UK are all robust, heavily regulated, highly transparent markets where real estate prices have historically increased over the medium to long term, and their attractiveness will only increase as the dollar continues to strengthen in the current cycle,” he said.
The same markets proved popular for Asian rival Singapore, with Australia topping the charts with 32% of the vote, the UK in second place at 16% and Japan in third with 13%.
“The rising value of the Singaporean currency – which has strengthened against the Australian Dollar, British Pound and the Japanese Yen over the past 12 months – has opened up new opportunities for Singaporean investors in these countries,” said Singapore-based Director Alex Bellingham.
This has been a key factor behind investors looking at overseas assets, particularly in these markets. The Singaporean Dollar has strengthened almost 30% against the Australian Dollar and more than 14% against the Japanese Yen since the start of 2013. It has also been rising steadily against the British Pound, gaining 8% in just the past five months.
For respondents outside of Asia, both the US and Australia proved popular destinations for property investment, both placing in the top three for those polled in the UAE, UK and South Africa. The UK topped the list for South Africans with 36% choosing the nation for property investment, followed by 34% choosing the USA and 29% Australia.
Commenting on the results, George Radford, Africa Director at IP Global said; “Investor sentiment is dampened by the prospect of political uncertainty, which is why South Africans have historically favoured investing in safe haven markets.
“The UK and Australia are good examples of robust, well-regulated, highly transparent markets where real estate prices have historically increased steadily over the medium to long term,” he continued.
The US also tops the list for UAE residents where 21% are interested in investing, followed closely by the UK (19%) and Australia (16%).
Richard Bradstock, Director and Head of the Middle East at IP Global, commented that, “As the results show, the US has proved the most popular market for UAE potential investors. This shouldn’t come as a surprise as both Miami and Chicago offer great potential for investors. Miami has achieved its second consecutive year of over 20% house price appreciation, and Chicago offers average yields of 7.9% according to Zillow.
Singapore and Germany were also popular choices for property investors in the UAE, each taking 13% of the votes and sharing fourth position. “At IP Global we have noticed a growing interest in Germany as UAE residents recognise the extraordinary value that cities such as Berlin have. For example, in 2015 the median property price increase in Berlin was 18.5% according to CBRE.”
UK residents also seemed to have noticed the potential that Germany holds for overseas property investment as it placed in the top three destinations with 7% of UK-based respondents, with Australia (12%) and the USA (14%) rounding out the favoured three.
Stay tuned for part three, where we look at the barriers to entry for overseas property investors and reveal the factors that are preventing different investors across the globe from putting their money into real estate abroad.