Residential properties in Dubai offer over 7 per cent gross rental returns on average, placing the UAE among the world’s most lucrative locations to invest in, a new report by Property Finder has revealed.
The UAE has higher rental returns compared to several property investment havens worldwide – the average gross rental yield in London is 2.9 per cent, while Hong Kong offers 2.35 per cent. Sydney and Singapore offer 2.85 per cent and 3.3 per cent respectively while in Toronto, the yield averages 3.9 per cent, the bi-annual ‘Property Finder Trends’ report noted.
Gross rental yield is what a landlord can expect as return on his investment before taxes, maintenance fees and other costs.
Areas offering the highest rental yields in Dubai
Apartments in Dubai’s International City offered the highest gross rental yield of 10.6 per cent in the second half of 2019, the report found.
It was followed by Discovery Gardens (8.6 per cent), Al Barsha (8 per cent), Barsha Heights or Tecom (7.9 per cent), Dubai Sports City (7.8 per cent) and Jumeirah Village Circle (JVC) (7.6 per cent).
Meanwhile new villa/townhouse communities also offer high gross rental yields.
Town Square offers the highest gross rental yield at 7.6 per cent, followed by Mudon at 7.3 per cent, Reem at 6.4 per cent and JVC at 6.3 per cent, Property Finder’s platform Data Finder has revealed.
More established villa/townhouse communities like Arabian Ranches (4.9 per cent), Motor City (5.2 per cent) and Barsha (5 per cent) offer smaller yields.
“Overall, rental yields in Dubai are still regarded as being some of the highest around the world,” said Lynnette Abad, director of Data and Research, Property Finder.
“More mature communities such as Dubai Marina, Downtown Dubai and the Palm Jumeirah stand at 6.3 per cent, 4.8 per cent and 5.3 per cent respectively,” she added.
Yields in Abu Dhabi, northern emirates
The affordable community of Al Reef in Abu Dhabi offers the highest gross rental yield for apartments in the emirate at 8.8 per cent.
Apartments in Al Ghadeer (7.8 per cent) and Yas Island (7.2 per cent) also fetch strong returns, the report said.
Meanwhile, for villas and townhouses in the UAE capital, Al Ghadeer (6.9 per cent), Al Reef (6.4 per cent) and Al Raha Beach (6.1 per cent) topped the list.
In Ajman, apartments in Emirates City provided the UAE’s second best gross rental yield at 10.5 per cent. Ajman Downtown (8.7 per cent) and Al Hamra Village in Ras Al Khaimah (8 per cent) also provided apartment buyers with good rental returns.
Meanwhile, Ras Al Khaimah’s Al Hamra Village (6.3 per cent) and Mina Al Arab (4.7 per cent) offered the best gross yields for villas/townhouses.