Highlights include:
- Affordable apartment communities like Discovery Gardens and Dubai Sports City offer the best rental yields
- New villa/townhouse communities like Town Square, Mudon and Reem are more suitable for buy-to-let investors as they offer higher rental yields
Dubai: International City apartments offer the best gross rental yield in Dubai at 10.6 percent, according to the ‘Property Finder Trends’ report, released bi-annually by the leading portal.
Gross rental yield is obtained by dividing the annual rent by the property’s purchase price and multiplying by 100. This is what a landlord can expect as return on his investment before taxes, maintenance fees and other costs. When buying a property, it’s important to calculate the yield. As a benchmark, a rental yield of 7 percent or more is considered very good.
The UAE has higher rental returns than some of the most popular locations for property investment in the world. Gross rental yields in global property hotspots are in the low single digits. Consider, for instance, the average gross rental yield in London (2.9 percent), Hong Kong (2.35 percent), Sydney (2.85 percent), Singapore (3.3 percent) and Toronto (3.9 percent) while Dubai properties offer over 7 percent gross returns on average. This makes the UAE one of the best places for buy-to-let investors.
“Overall, rental yields in Dubai are still regarded as being some of the highest around the world. More mature communities such as Dubai Marina, Downtown Dubai and the Palm Jumeirah stand at 6.3 percent, 4.8 percent and 5.3 percent, respectively,” says Lynnette Abad, Director of Data & Research, Property Finder.
Affordable apartment communities traditionally offer the best rental yields. In H2 2019, areas like Discovery Gardens (8.6 percent), Al Barsha (8 percent), Barsha Heights or Tecom (7.9 percent), Dubai Sports City (7.8 percent) and Jumeirah Village Circle, or JVC (7.6 percent), offered the highest gross rental yields to investors.
New villa/townhouse communities are more suitable for investors as they offer higher gross rental yields. According to Data Finder, the real estate data and insights platform under the Property Finder Group, Town Square yields the highest gross rental yield at 7.6 percent, followed by Mudon at 7.3 percent, Reem at 6.4 percent and JVC at 6.3 percent.
More established villa/townhouse communities like Arabian Ranches (4.9 percent), Motor City (5.2 percent) and Barsha (5 percent) offer smaller yields.
Yields in Abu Dhabi, Northern Emirates
The affordable community of Al Reef in Abu Dhabi offers the highest gross rental yield for apartments at 8.8 percent. Apartments in Al Ghadeer (7.8 percent) and Yas Island (7.2 percent) are also sought-after by buy-to-let investors.
Villas and townhouses in Al Ghadeer (6.9 percent), Al Reef (6.4 percent) and Al Raha Beach (6.1 percent) are popular among yield-chasing investors in Abu Dhabi.
Apartments in Ajman’s Emirates City provided the UAE’s second best gross rental yield at 10.5 percent. Ajman Downtown (8.7 percent) and Al Hamra Village in Ras Al Khaimah (8 percent) also provided apartment buyers with very good rental returns.
Meanwhile, Al Hamra Village (6.3 percent) and Mina Al Arab (4.7 percent), both in Ras Al Khaimah, offered the best gross yields for villas/townhouses.
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