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Where are the Gulf’s wealthiest investors likely to invest next year?

The property markets in London, New York and Singapore have been among the most popular international destinations for the Gulf’s wealthiest investors in recent years, but a new report by Cluttons has found that the top choice for many of the GCC’s high-net-worth individuals next year is likely to be Dubai.

Weakening property prices was cited as the primary reason why more people are interested in investing in Dubai’s property market, along with the upcoming Expo 2020.

Murray Strang, head of Cluttons’ Dubai base, said that the Expo’s potential for capital growth and higher yields in the market means that “people now see really good value for money in Dubai”.

He commented: “I think that’s why some people are calling the bottom of the market in the near future, and I think we’re seeing a lot of GCC high net worth individuals who are now seriously looking at Dubai, given that prices have become more attractive over the past year or two.”

Cluttons’ third Middle East Private Capital survey ranked London in second place for GCC wealthiest investors next year alongside Paris and Doha, while Toronto came in at number three.

For this year, the UK capital remains the top destination outside the Middle East for Gulf investors, cited as a top three market by 17% of the 127 millionaires interviewed by Cluttons, ahead of New York at 16% and Singapore at 13%.

This is despite London property values reaching as much $4,000 (£3,230) sq ft, which is approximately three times the price of high-end apartments in Manhattan and Singapore’s Marina Bay.

Property in London

The housing market in London is slowing after witnessing capital growth of around 70% over the past seven years. But the slump in sterling’s value could help market activity in the city improve in the coming months, as international investors seek to take advantage of property price falls as a result of the weaker UK currency.

For example, London property is now 34% cheaper than it was nine years ago for those investors buying property in the UK with US dollar or pegged currencies such as the dirham, according to Cluttons head of research Faisal Durrani.

He commented: “If you look at the upper echelons of say £2m to £5m, your Brexit saving is close to half a million dollars. For buyers in the Gulf whose pegs maintain a fixed rate against the dollar, that is a very significant saving, which is why we have seen interest in markets such as Belgravia and Chelsea following Brexit with Kuwaiti and Emirati investors taking full advantage in the currency situation.

“The flipside is that other buyers are saying there’s a potential correction in the market in London and there is potential for sterling to fall further. So there are those who want to take the opportunity and enter the market and those who want to wait and see how it goes.”

Property in Doha

Demand for property in Doha is being fuelled by the football world cup which will take place in Qatar in 2018. Many property investors believe that the football competition will help boost long-term tourism levels in Qatar, which in turn may increase property prices and rents.

Property in Paris

A growing number of Qataris are attractive to Paris, thanks in part to a government tax treaty and the recent purchase by the Qatari Investment Authority of a luxury retail complex on the Champs Elysee.

Property in Toronto

Property investors cited Toronto’s high living standards and education institutions as factors in their choice. 

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