Falling oil prices have spurred Middle Eastern investment in real estate, according to one of the world’s leading luxury brokers.
Locations attracting investment from the region include London’s Mayfair and Knightsbridge, as well as Paris, New York and the South of France, said Giles Hannah, SVP at Christie’s International Real Estate.
“We’re seeing a direct correlation between the drop in the oil price and people wanting to purchase residential trophy properties,” he told Gulf Business.
“We focus, generally speaking, above the 10 million pound level and above and we’re seeing that, particularly from this region, this is where clients are wanting to buy.”
Hannah revealed the auction house subsidiary has seen around a 23 per cent increase in new applications registering to buy property in the last eight months, with a noticeable trend of investing in European property rather than leaving money in local accounts or funds.
“It’s partly about maintaining and growing their wealth, it’s also definitely about security. People want to know their money indeed their families are safe.”
While London is still the most attractive market for this regional investment, on a global scale other luxury markets are growing in popularity.
Real Estate Consultancy Knight Frank listed New York, Aspen, Bali, Istanbul and Abu Dhabi as the top five hottest luxury property markets in the world last year by price increases.
Hannah said Sardinia was attracting Saudi Arabian, Qatari and Emirati investors, while New York was luring Qataris and Kuwaitis looking for serviced apartments.
“Paris is still trading at about 25 per cent less than London. So for many Middle Easterners that’s being seen as good value,” he added.
Other locations outside of the traditional London addresses of Mayfair, Chelsea and Knightsbridge, are also being eyed by luxury buyers, including the City financial district.
A fifth of buyers at the 41-serviced residence 10 Trinity Square development being sold by Christie’s International Real Estate are expected to come from the Middle East, he said.
Christie’s International Real Estate added a Dubai affiliate in November last year, it’s first in the Middle East region.
Focussing on the luxury end of the market, the broker is selling property including apartments in Downtown Dubai, a luxury building in DIFC, and others in Emirates hills. However, initial plans to sell a luxury palace in the emirate never emerged.
The company is also pitching with its affiliate on some “major branded residences services by five star hotels”, according to Hannah.
“Particularly with expo 2020 coming up a few years from now there is lots of hotel and residential development planned and we will be quite active working with the affiliate on that.”