Rental yields in Dubai going up

Apartment and villa rentals in Dubai increased by 3% in the year’s first quarter.

Good news for tenants is that, according to JLL consultancy, Dubai annual rentals fell on average by 3% year-on-year, but the first quarter of 2016 showed a significant increase compared with the last quarter of 2015, bringing the average rental yields in the emirate up to 6% to 10%, depending on the location and type of property.

“Overall, apartment and villa rental yields have increased around 10 per cent and 7 per cent, respectively when compared year-on-year. Since investors look for better rental yields, the real estate market here has remained attractive for investors,” Reidin Data & Research Manager Ozan Demir has confirmed.

For studios, average yields are 5% higher than a year ago, that is about USD 16,000 pa. And most demanded by tenants one and two bedroom apartments showed an increase of 4% during the year and currently stand at an average of USD 26,700 - 42,000 pa, while three to four beds now bring their owners 3 to 4% better yields, respectively, that is an average of USD 57,000 -87,400 pa, respectively.

As for the areas, two bedroom apartments in Dubai Marina can provide their owners one of the best rental incomes ever — 6 to 10% pa, that is USD 25,000 to 45,000 pa. Studios in Jumeirah Village show the more even yields of 8-9% and USD 9,000 -13 000 pa, as well as elite properties in the Palm Jumeirah do (up to USD 76,000 of rental income pa, depending on the housing area). Among Dubai’s leading locations for lease there are also Jumeirah Beach Residence, Jumeirah Lake Towers, Downtown Burj Dubai, Discovery Gardens, Greens and villas in The Springs, bringing real estate owners one of the highest world’s rental yields.

Commenting on the market’s latest trends, Craig Plumb, Head of Research at JLL Mena, also noted: “Not only did we see real estate developers carefully considering demand before supplying market with new units, we also saw an even distribution and movement of residents from the city centre to suburbs.” 

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