Emirates NBD has tipped the UAE property market as a good investment opportunity, amid wider hopes of a revival of fortunes in the once-troubled sector.
Property represents a promising choice as an alternative asset-class investment, said Mark McFarland, the chief investment strategist at Emirates NBD Wealth Management.
"Real estate in the UAE continues to offer good affordability while demand is seen rising, particularly in apartment and commercial sectors," he said.
"We see an 8 per cent yield on local property and are generally optimistic about the market here over the next 12 months."
Hopes about a revival in the emirate's property market rose in the past six months as rents and purchase prices climbed in response to demand in popular areas such as The Palm Jumeirah, Downtown Dubai and Dubai Marina.
Values had slumped more than 50 per cent in some areas between 2008 and 2011, as a bubble inflated by cheap credit and market speculators burst.
The market continues to face challenges. In many pockets of Abu Dhabi, supply continues to outweigh demand.
The Central Bank is also planning to impose tighter regulations on mortgage borrowing in an effort to curb the risk of fresh speculation in the market.
Outlining Emirates NBD Wealth Management's investment guide for the year, Mr McFarland said that fine art represented another attractive alternative asset class.
"While not a key component of a balanced 2013 portfolio, this does offer critical low volatility and low correlation to normal asset classes," he said.
Generally, investors should move their money out of fixed-income assets into equities as returns on bonds diminished as the global economy stabilised, Mr McFarland said.
"The whole trend we've had over the past two years of investing in fixed income is now coming to an end," he added.
