The UAE has been named as the best country for first-time buyers, new research carried out by MoveHub has revealed.
Based on factors such as income and property price growth, MoveHub analysed 33 countries in 2016 to see which nation is best for those buyers who are taking their first steps on the property ladder. The report cross-checked data on the average change in property prices with average salary increases, with the tiny, oil-rich nation of UAE – which includes the emirates of Abu Dhabi and Dubai – finishing in top spot.
It was, the report revealed, the countries with the biggest rises in property prices that had also seen the slowest increase in annual incomes. In some cases, salaries fell while house prices grew dramatically. By contrast, countries with the highest growth in salaries also enjoyed more affordable property prices or even negative price growth, making them the ideal locations for first-time buyers.
Average real wages in the UAE experienced a hike in 2016, while the nation's property market witnessed a drop in value of -7.96%. This sharp fall in house prices in some of the UAE's most desirable locations suggests that the affordability gap is, in comparison to other nations, closing considerably faster, with wages playing catch-up with house prices.
Singapore also performed well, finishing in the top five best countries for first-time buyers. The expat-heavy region saw salaries grow by 3.7% while house prices continued to fall by 3.37% after the government stepped in to cool soaring property values.
Turkey, meanwhile, was identified as one of the worst destinations for first-time buyers, with property prices up by more than 16% in 2016. On the other hand, real wage growth increased by just 0.6%.
Turkey, often seen as the primary link between East and West given its geographical location and the fact it straddles both Europe and Asia, has become particularly appealing to overseas buyers, with foreign investment sending property prices through the roof and out of the reach of most ordinary citizens.
It's a similar situation in the UK, with stagnant wages and relentless property price growth in recent years leading to the UK housing market comfortably outgrowing wage increases. In 2016, house prices in the UK rose by an average of 5.7%. At the same time, wages grew by a much more modest 2.3%.
“In general our research shows house prices going up and wages stagnating. What is interesting is that where a government has intervened, like in Singapore, the gap has narrowed, meaning there are steps that can be taken to curb this disparity,” Harriet Cann, head researcher at MoveHub, commented.