Top locations in Dubai that offer highest returns for property investors

Dubai Marina and International City are among the top areas to watch for investors who are looking to earn the most on rental homes in the UAE. Properties in these locations offer the most attractive return on investment (ROI) within the luxury and affordable segments, according to a new report by property portal Bayut.com. Residential units in Dubai Marina are projected to offer an ROI of 7.04%, the highest rental return for luxury apartments, while flats in International City can generate returns of 9.22%, the highest in the affordable segment. For budget-friendly villas, Jumeirah Village Circle would be worth looking into, as it has so far generated the most attractive ROI of 6.9% in 2022. For those looking at buy-to-let villas, DAMAC Hills can be a good option, as properties in the area have offered the “heathiest” rental yields of 6.95%, according to Bayut. Attractive destination Buying residential units to let has been a popular option for many investors. The relatively low tax regime in the country, attractive sales prices, strong tenant demand, and high-quality infrastructure and lifestyle, make the UAE an attractive place to invest. Due to strong demand, leasing rates for apartments and villas have gone up considerably over the past year. In Dubai Marina alone, asking rents for flats surged by 39%. Tenants in the area now pay an average of AED91,000 ($24,775) a year for a one-bedroom unit, AED140,000 for a two-bedroom flat and AED207,000 for a three-bed home. Dubai Marina has emerged as one of the most sought-after locations for prospective buyers who are on the lookout for luxury properties. “Tenants looking for luxury apartments in Dubai have continued to be attracted to the properties in Dubai Marina during 2022,” Bayut said, adding that other popular locations include Downtown Dubai, Arabian Ranches and Dubai Hills Estate. Budget segment In Jumeirah Village Circle, which is an attractive destination for tenants in the budget category, rental costs for flats have significantly gone up by 14% to 24% in 2022. On average, tenants last year had to shell out around AED36,000 for a studio unit, AED51,000 for a one-bedroom flat and AED 73,000 for a two-bed apartment. In DAMAC Hills 2, rents have gone up by as much as 9% for three and five-bed units, which now cost around AED63,000 and AED98,000, respectively. Four-bed units, on the other hand, “became more affordable” by 5.3%, with annual rents averaging at AED74,000 in 2022, according to Bayut. However, sales prices have gone up as well. Based on Bayut’s data, sales prices for apartments and villas in the most prominent neighbourhoods of Dubai have increased by 2% to 24% in 2022. Bayut said the demand for real estate in Dubai has continued to rise, as evidenced by the transaction data released by the Dubai Land Department. “It has been well documented over the last year that the real estate market has outperformed expectations, with record-breaking transactions, attractive new launches and favourable investment opportunities,” Bayut said. (Reporting by Cleofe Maceda; editing by Seban Scaria) Cleofe.maceda@lseg.com

Top locations in Dubai that offer highest returns for property investors

DISCOVER MORE

Wasl unveils 3,800-unit Dubai gated staff accommodation project

Landlords raise rent on more than half of properties in England: ONS

Real estate leader on NY Fed board warns on commercial real estate risks

Dubai records over $264.30mln in realty transactions Friday

Dubai logs over $2.34bln in weeklong real estate transactions

Saudi: Arriyadh Development declares lower profits in 2022, dividends proposal

South African proptech leaders Flow secure $4.5mln in funding to enable the global property industry

Samana launches $54mln residential tower in Jumeirah

UAE exchange firm Al Ansari upsizes IPO on strong investor demand

Dubai's Emirates expands training fleet with $4.3mln aircraft order

2 African development banks invest $16bln in oil, gas projects

GCC central banks track US Fed move; hike key rates by 25bps

UAE's Presight AI to debut on Abu Dhabi Securities Exchange next week

Dubai's Meraas to build new residential towers in Design District

Dubai-based Samana launches $55mln Waves-2 residential project in JVC

Dubai records over $544mln in realty transactions on Wednesday

Dubai records over $626mln in realty transactions on Tuesday

Dubai records over $462.8mln in realty transactions Monday

LATEST VIDEO

VIDEO: LSE-listing will facilitate more funding opportunities for us, Dar Global CEO

ZAWYA COVERAGE

Will gold face more downside or upside after Fed's rate hike?

Kenya signs $250mln deal with UK to boost food production

PODCAST: IFC is ready to back governments privatisation plans with capital

UAE's Presight AI to debut on Abu Dhabi Securities Exchange next week

India-UAE travel alert: Airline announces changes to flight timings; all passengers advised to reconfirm

AD Ports Group launches new Ro-Ro Shipping Service to improve commercial connectivity with Kuwait

Reese Witherspoon, agent husband make 'difficult decision to divorce'

Influencers take stock of life and dreams if U.S. bans TikTok

Binance says withdrawals have resumed after technical glitches

THE BRI REPORT

China is reshaping the Belt and Road Initiative ahead of a post-pandemic era

DISCOVER MORE

LATEST VIDEO

ZAWYA NEWSLETTERS

ZAWYA COVERAGE