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Dubai offers one of the highest global investment returns

17.03.2019
Dubai offers one of the highest global investment returns

A number of fresh analysts' studies, including the latest by Moody's, confirmed Dubai’s status as the best world’s direction for real estate investments. Read more for which areas guarantee the highest return on investment in Dubai real estate.

Despite the decline in real estate prices and rentals in the past few years, rental income in Dubai more than doubled when compared to other major cities of the world, such as London, Paris and New York, according to industry analysts.

A recent study from the international rating agency Moody's Investors Service revealed that the demand for Dubai housing is expected to get further continuous support through attractive average rental income of 6 to 7 percent recorded during the last 12 months.

This is a fairly very attractive income compared to other major capitals, such as London, Paris, New York or Hong Kong, where average rental yields range between 2 and 3 percent, according to Moody's, citing data from the Global Property Guide.

However, experts have repeatedly stressed out that Dubai real estate market has a very heterogeneous nature and prices, as well as rental income, can differ greatly in different areas and for different types of properties. So, which areas should you pay attention to if you intend to invest in Dubai, and expect the highest possible return on your investments? Here are some data on the areas provided by the real estate search portal Propertyfinder.

Apartments in Arjan topped the list of localities with the highest average rental income of 12.4% per annum, while quite affordable and detached International City district improved its rates to 10.1% from 9.2% due to high rental demand from tenants having moved there from other emirates in the second half of 2018.

These are followed by Dubai Silicon Oasis, Jumeirah Village Triangle, Town Square, Al Barsha, Dubai Investment Park, Green Community, Dubai Sports City and Al Quoz, offering rental income of 8-9%.

At the same time, the central Downtown area offers the lowest return of 4.5 percent, followed by Culture Village, Mirdif, Old Town and Al Sufouh. But data show that even Dubai areas with the lowest return on real estate investments can provide higher income than large Western cities, where the average rental yields does not exceed 2-3%.

In the villas and townhouses segment, Dubai's Town Square area offers the highest rental return of about 7.2%, followed by such villa communities as Mudon, Reem (Mira), Springs and Jumeirah Village Circle. And the lowest rental income for villas and townhouses — from 2.3% to 3.4% per year — is currently found in such areas of Dubai as Emirates Hills, Palm Jumeirah and MBR City.

"Typically, smaller properties produce better rental yields than larger ones. Apartments are better than villas, and studios are better than larger apartments, for example," said Lukman Hajje, chief commercial officer of Propertyfinder.

"But also consider location. Newer, emerging communities offer higher gross rental yields than more established communities but often have higher vacancy and lower capital growth potential," Lukman added.

At the same time, Moody's expects that the demand for Dubai housing will grow at a slower pace compared to the number of new properties filling the market over the next 12-18 months.

A recent report by Knight Frank has revealed that Dubai is the 18th least expensive city when it comes to prime real estate prices. The consultancy's data revealed that $1 million can buy 1539 square feet of prime space as compared to 172 sq ft in Monaco, 236 sq ft in Hong Kong, 334 sq ft in New York and London and 388 sq ft in Singapore.

IMEX Real Estate will always help you to invest in Dubai’s property with the highest level of investment income. Turn to our Investment Guide to know more about various investment packages, depending on your purposes. Trust the professionals! Our contacts:

Tel. in Dubai, UAE: +971 (50) 2528188 (Whatsapp, Viber, Telegram)

Toll Free Dubai: 800-IMEX (800-4639)

IMEX REAL ESTATE BROKER LLC, UAE

Office 2502, Marina Plaza, Dubai Marina, Dubai, UAE

Email: pm@IMEXre.com

Skype: resident69

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