In the last couple of months, Dubai has recorded the highest net return on
The fact is that the real estate capital value in all Dubai areas is now decreasing faster than the cost of renting. In the second quarter of 2019, the ValuStrat Price Index in the real estate sector showed that the average Dubai annual rentals decreased by 10.6%, and the average capital value decreased by 11.5%. And when capital value decreases faster than rents, net yields will increase — this is the consistent pattern of the real estate market, experts say.
In the affordable real estate category, the demand for rental units is growing faster than in the commercial sector, since the main target group of the landlords renting out their properties — about 75% of the working foreign population — earn less than AED10,000. These people are looking for affordable apartment renta because they simply can’t afford to buy property. Affordable units in areas like International City,
For example, in International City, the net return was 8.2% in July this year, and for the same period last year, investors received here 7.5% of the net profit. At the same time, from July 2018 to July 2019, the capital values of real estate in this community decreased on average by 14.3%, and on an annualized basis — by 4.7%.
Nevertheless, not only affordable communities have witnessed an increase in net profit, but even middle and high-class communities have recorded an increase in rental yields this year. For example, The Greens,
And the average rentals in these communities, however, did not decrease to the same level, which led to an increase in yields. Another factor that had a positive effect on net yields is a reduction in service fees in many areas of the city.
Today, even the best, most sought after and fashionable communities offer a high level of return on investment for real estate in Dubai. For example,
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