10 March 2017
10 Years Gone By
10 years have gone by since the World Financial Crisis, which commenced with a collapse in the sub-prime mortgage market in the USA. It later developed into a full blown international banking crisis causing equities, commodities and real estate assets to fall by more than 50%.
A total return analysis (appreciation and rents) of real estate asset in major cities (Dubai, New York, Singapore and London) since the world financial crisis, reveals that the returns per annum ranged between 5% to 11%. Dubai and Singapore real estate assets have returned more than 120% in the form of rents and capital gains over the last decade, whereas London and New York have returned 75% and 63%. The bulk of returns in New York and Dubai have been in the form of rental returns, whereas Singapore has been in capital gains.
Commodities such as Gold and Silver experienced an increase in their prices since the recession in 2007. Gold prices increased by 92% from January 2007 to February 2017, whereas, the prices for silver increased by 36% during the same period. However, “Oil” lost all its gain following the 2014 oil price crash, where the prices level retreated to the pre-2007 era.
Almost a decade after the world witnessed the worst global recession in 2007, Dubai and Singapore emerge as the top winners in terms of investor returns, closely behind the much riskier Nasdaq technology weighted index. This attests to Dubai’s growing popularity in terms of being the preferred destination for real estate investments.