The real estate of Singapore, Madrid and Tokyo for the year has risen in price by more than 10%, and the demand for it continues to grow, but in Dubai and London prices are declining following demand. In more detail about the forecasts for the elite real estate market of the EU for 2019, the general manager of the company International Luxury Property Expo (ILPE) Ksenia Korzun tells.
In the elite real estate of which countries is it most profitable to invest in 2019 and why?
First of all, investors are interested in countries where real estate has steadily increased in price or has been actively rising in recent years. In Singapore, luxury housing has risen in price by 11.5%, Tokyo (9.4%), Beijing (7.3%) and Madrid (10.3%) have shown good dynamics.
In 2018, Spain was the undisputed leader in price increases for luxury real estate in Europe – prices here rose by 10.4%, and the number of transactions in the market rose to 13%. Most of all, British, Americans, French and Belgians have invested in real estate in Spain.
Also for many years, the most attractive country for buying luxury real estate in Europe remains Germany. This can be explained by a stable political situation and a transparent tax system. In 2018, the elite real estate in Berlin went up by 8.5%, which is only 2% lower than the figure for Madrid. According to the forecast of ILPE analysts, real estate in the capital of Germany will continue to rise in price at least until 2020. Last year alone, the German property market attracted investments of 57.5 billion euros. According to the number of requests received by ILPE, Germany’s real estate took the first place among EU countries in 2018.
In which countries there is a steady increase in real estate prices, and in which, on the contrary, a decrease?
In 2019, according to analysts, prices for luxury real estate will continue to grow. It is expected that the leaders will be Madrid, Paris and Berlin. Here the growth will be 6%. Prices will also increase in Canada and the United States. At the same time, we should expect a slowdown in the Singapore market, as well as a decline of 10% in the Hong Kong luxury real estate market.
The most expensive housing in the EU is now in Monaco – 1 m² worth 62.5 thousand dollars. On average, in 2018, prices for elite real estate of the European Union increased by 6%. Western European countries remain the most desirable for investment in order to preserve assets.
Due to political instability, luxury real estate in London fell by 1.8% and 2.4% in Istanbul. And in the world, the Vancouver market sank the most. Here, real estate prices dropped by as much as 6.2%. Also, analysts’ expectations regarding the elite real estate market in Paris did not materialize. Instead of the expected 9%, prices rose by 6%. Nevertheless, in the forecasts for 2019 Paris remains in the top five cities with the hottest real estate market.
If several years ago investors were massively interested in the UAE, now the trend to reduce prices in the country (an average of 6% per year) makes us carefully select objects for investments. Nevertheless, the volume of transactions is still high, and in 2020 a gradual recovery of the market and an increase in real estate prices are expected thanks to the Expo 2020 exhibition, which will be held in Dubai.
Also, 2018 was very successful for the US luxury real estate market. If prices in New York remained stable, in Los Angeles they rose by 7.8%. Also, analysts say that real estate in San Francisco is in great demand among investors. Here, sales of homes worth more than $ 2 million increased in 2018 by 16%. The number of deals has especially increased in the San Mateo District, which is part of Silicon Valley. In the secondary real estate market, Santa Fe property was in the greatest demand – the number of transactions increased by more than 16%. A significant increase in prices and the number of transactions was noted in Canada. The city of Victoria in British Columbia topped the ranking of the “hottest” – the number of transactions in it for the year increased by more than 26%.
What segment of the elite real estate market prevails in the number of investments?
The richest people in the world spent $ 46 billion on travel in 2018, and this directly affected the growth in hotel profitability and the volume of transactions in the hotel real estate market.
At present, the global volume of the elite hotels market exceeds 83 billion dollars, of which 22 billion falls on the EU market. According to the experts of ILP Expo, in the near future, growth in the market will be 4%. For comparison, in the third quarter of 2018, growth reached 3%.
Despite Brexit, in 2018 the amount of investment in hotel property in the UK reached 6.8 billion euros. This is 15% more than in 2017, and accounts for 30% of all investments in European hotels. Second place in investments in hotel real estate took Spain. In 2018, the size of investments here amounted to 4.8 billion euros: 23% more than in 2017. In third place is Germany. In 2018, in the hotel services market of this country, transactions were concluded for a total amount of 4.09 billion euros. That, however, is 20% less than in 2017.
In 2018, in five of the largest German cities, the profitability of hotels operating under a management contract or being in freehold decreased by 25%.
According to the forecasts of ILPE experts for 2019, the growth of the hotel real estate market in the EU will continue and will be 4%. This will affect not only the most popular tourist countries of the EU, but also Croatia, Slovenia, Romania. In these countries, investment in hotels can make up from 20 to 80% of all investments in real estate.
International Luxury Property Expo (ILPE)
Exhibitions of elite foreign real estate in B2C format, which are held for private investors HNWIs around the world: in Cannes, Shanghai, Mumbai, Moscow, Bangkok and other cities. The largest exhibition Monaco International Luxury Property Expo 2019 will be held May 15 – 16 in Monaco, in the “Grimaldi Forum”, and will bring together 200 developers and 1000 private investors from 80 countries of the world.
ILPE works directly with private investors and analyzes interest in luxury real estate around the world.
The data in the report is provided by the ILPE analytical service.
UAE. General Market Information
The United Arab Emirates includes 7 emirates – Abu Dhabi, Ajman, Dubai, Ras al-Khaimah, Fujairah, Umm Al-Quwain and Sharjah.
Purchase of real estate by foreigners in full possession (freehold) is allowed only in certain areas of the United Arab Emirates. Residential real estate and land in other areas are available only in leasehold – long-term lease (10-99 years).
The largest selection, but with the highest prices observed in the Dubai market. Here property in the property is available in 23 districts and 45 land plots.
Also among Russians, real estate in Ras al-Khaimah and Abu Dhabi – the largest emirate, where property in the property can also be bought in specially designated investment areas. At the end of 2014, Sharjah opened its real estate market to foreigners.
In Fujairah, washed by the Gulf of Oman, Indian Ocean, the acquisition of real estate ownership is possible only in one project – the 170-meter tower of Al-Jabar, in other areas only leasing is available. Most investors are interested in renting commercial real estate – offices and retail space.
Real estate Ajman – the smallest emirate of the UAE, and Umm Al-Quwain, despite the presence of long coastlines and the possibility of full purchase of real estate, are not in great demand from foreign investors.
According to the Global Property Guide portal, 1 square meter of real estate in the UAE averages $ 5037, in Abu Dhabi this figure hovers around $ 3,100, and in Dubai 1 “square” costs about $ 4,800. In the segment of elite real estate the price starts from $ 7,000 per 1 sq. M. m
The yield from the rental of real estate is about 7.5% per annum.
Visa, residence permit, UAE citizenship
The United Arab Emirates and Dubai in particular are the favorite place for Russians to relax and buy property; The emirates’s visa regime is friendly to foreigners, but the rules for submitting documents and their approval are quite strict, and the purchase of housing or commercial facilities gives the right to obtain a long-term resident visa.
All foreigners need a visa to enter the United Arab Emirates. The exceptions are citizens of the Middle East countries: Oman, Qatar, Bahrain, Kuwait and Saudi Arabia.
The UAE provides visas of standard categories to foreigners – tourist (short-term), transit, resident (long-term). As such, the concept of “residence permit” in the Emirates does not exist. All foreigners who stay for a long time on the territory of the country are issued a resident visa. That is what you can get when buying property.
A special feature of the visa in the UAE is primarily the electronic filing of documents. Documents must be sent at least five working days before the estimated date of travel. Visa services are provided by the UAE and Dubai visa centers, hotels and airlines of the country. So, a transit visa for a flight through, say, Dubai, valid for 96 hours, can be issued at any airport in the country. The “window” of entry is 58 days. Emirates passengers can do this using the Dubai Visa Processing Center (DVCP) mobile app, available for download on the App Store or Google Play. Tourist visas are issued for a period of 30 or 90 days.
It is important for all applicants to remember that a passport must have a validity of at least six months after the end date of the planned trip. Otherwise, the authorities of the Emirates may refuse a visa.
Lonely women under the age of 30 should be borne in mind that the UAE authorities may refuse to issue a visa. When traveling with a spouse who has a name other than her husband, you must have a notarized marriage certificate.
Resident – long-term – visas of the government of the Emirates issue to foreigners who come to the country for employment, investors in the country’s economy, as well as property buyers. In the case of employment, a visa is drawn up by the employer, it is impossible to obtain it yourself. The term of validity of a resident visa is usually two years. It is subject to further renewal subject to all the conditions of the relevant legislation. Resident visas can also be obtained by direct family members of the main investor. Such a visa, unlike a tourist visa, is pasted into a passport. Applicants for the status of a resident of the United Arab Emirates must pass a blood test in a hospital in the territory of the Emirates, including hepatitis C. After a residence visa is issued, a foreigner can receive a small plastic card – Resident ID. Women investors need to keep in mind that the status of a resident of the UAE, as in the case of men, “automatically” is not transferred to their husbands, therefore, as a rule, when buying property, it is issued to the head of the family.
List of documents for a residence visa
A clear color copy (in .jpg format) of the first page of a foreign passport, including children, who will also enter the territory of the UAE.
A scan of a color portrait photo measuring 3.5×4.5 cm (strictly not a passport photo) of a tourist and his children, two pieces, no larger than 60 kb.
A completed application form in English, two copies
Documents confirming employment, investment or purchase of real estate in the UAE.
Visa when buying property
Despite its relative youth, the real estate market of the UAE and Dubai in particular has established itself as a stable direction – and investments in it definitely have the status of prestigious. Dubai’s mentality is “growing up”, no longer wanting to have the image of a city to which they come exclusively for quick and high earnings. Despite the decline in the last two years, Dubai is still a favorite place to invest, and property buyers have every right to be granted temporary resident status.
The Directorate General of Residents and the Ministry of Foreign Affairs are in charge of arranging residence visas for foreigners. As for the most popular destination of the United Arab Emirates – Dubai, to obtain such a visa, if all documents are available, the foreign applicant will need confirmation from the Department of Land Tenure and the Economic Department of Dubai. When this permission is received, the visa is issued for a period of two years, and the maximum period of stay in the country is not limited. However, visa holders should not be outside the country for more than six months in a row.
The minimum amount of investment in real estate in Dubai should be from AED 1 million (about € 260,000), and housing should be located in the so-called “freehold” zone, freehold.
Foreigners and investors are not eligible for UAE citizenship. It is transmitted exclusively by inheritance. Children of foreigners born in the territory of the Emirates are not eligible to apply for citizenship, this also applies to those children, one of whose parents is a citizen of the country.