(MENAFN- Khaleej Times) UAE buyers to leverage visa waiver strong dollar.
UAE investors could benefit from a bottoming out of the Spanish property market and buy second homes. Supplied photo
Dubai: The decision by the European Union (EU) to grant Emiratis visa-free access to the Schengen zone and a strong dollar-pegged dirham will help open doors for UAE buyers into the European property market international real estate consultancy Cluttons said.
”There is no doubt that visa-free travel to the Schengen area for Emiratis has unlocked the door for a significant potential upturn in cross-border property investment. The added benefit of the weakness of the euro means that dirham buyers are now about 23 per cent richer than this time last year in euro terms. This makes an EU-based property investment attractive” said Faisal Durrani Cluttons’ international research manager.
He said it is not just Emirati buyers that are in this position. “With most GCC states maintaining a fixed peg to the US dollar they are all well positioned to leverage this tremendous currency advantage that does not look set to weaken in the short term especially as the Greek financial saga lingers.”
The recent move by EU makes the UAE the first Arab country to be granted free entry to the Schengen zone. It means Emiratis can stay in 26 Schengen zone countries for 90 days in any 180-day period. Emiratis will also have visa-free access to eight non-Schengen countries: Bulgaria Croatia Cyprus Romania the Vatican Andorra San Marino and Monaco.
Even though the UK and Ireland are not in the Schengen area since the start of last year Emiratis have been able to apply online for a visa waiver for travel to the UK. The Schengen agreement brings to more than 100 the number of countries for which Emiratis do not require a visa.
Property buyers from the Middle East particularly the GCC invested a total of $14.1 billion outside their home region in 2014 making the Middle East the third largest source of cross-regional capital globally according to CBRE’s ‘Middle East In and Out 2015’ report.
Europe the sought-after investment destination for Mideast investors received $10.2 billion in 2014. In line with other investor groups the year saw a major shift in investment strategies with activity growing across second-tier European locations including Amsterdam Frankfurt Budapest and Madrid.
While still the most popular market London received 32 per cent of spend in 2014 compared to 45 per cent in 2013 with Paris and New York growing their shares in 2014 to 16 per cent and 10 per cent respectively. London and Paris were the only two markets to retain a top five ranking in 2014.
Joanna Leverett head of Cluttons’ international residential agency said research shows that property is always a favourite investment asset class among the world’s wealthy and London along with other key European capitals consistently features on top of property investment hot-spot lists.
“Our new office in Andalucia in southern Spain has been a run-away success. British buyers have been quick to sense the bottoming out of the Spanish property market and with sterling retaining its edge over the euro UK buyers are snapping up second homes across the sun-drenched Spanish coast. And this is a pattern we are seeing echoed across southern Europe. The rich Islamic heritage of southern Spain is likely to add to the overall appeal to GCC buyers” said Leverett.
Durrani said GCC-based buyers are looking at an eight to 10 per cent currency advantage due to the strength of the dollar. “And with our forecasts showing house price growth of almost 18 per cent over the next five years the capital value growth appeal of London will continue driving inward investment.”
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