27 07 2020

UAE offers the best return on real estate investment


Today we will show you how much you can earn by investing in real estate in the UAE in 2020. Perhaps you are thinking: "Why the UAE?" The answer is simple! Because it has one of the highest yields in the world.

You may have heard of the decline in real estate prices in general. However, it is worth noting that the yield obtained from renting real estate in Dubai, as well as in Abu Dhabi, exceeds rental yield in such world-famous cities as London, Vienna, New York or Paris by 2 times. This is a very tangible difference.

Even against the backdrop of falling prices, entrepreneurs give their preference to real estate located in the UAE, since the average yield remains very attractive and amounts to 6-7%.

To understand which rental yield is more attractive, you need to conduct a comparative analysis. For example, in Paris, Hong Kong, or London, the average yield is around 2-3%.

It should be borne in mind that in 2020-2021, profitability and real estate prices in general will decrease slightly due to the crisis caused by the pandemic, as well as due to the delivery of 117,000 places for housing, which, in turn, is equal to 22.5 percent from the current amount of housing. This fact will undoubtedly affect the price decline.

Despite this factor, the UAE holds the place where the investor can get one of the highest returns on real estate investment.

If you look at the various districts of Dubai, you will notice that there is a significant increase in gross profitability within them, for example, the International City district increased the yield to 10.1 percent.

By investing in residential or commercial real estate located in the areas of Al Barsha, Jumeirah Village Triangle, Al Quoz, Green Community, Dubai Sports City, etc., you will receive a 9% return.

Yes, there are areas in the UAE with a lower yield, 4-5%, but all the same, this yield will exceed the yield on investment in real estate in many large cities of the world, where it fluctuates in the range of 2-3%.

Regarding villas or townhouses, the most attractive indicator is the 7.2% yield in the Town Square area.

There is one unspoken rule, the smaller the size of the property, the higher the rental yield.

Don't forget the importance of choosing the right location. More established areas offer less attractive returns if comparing to relatively new emerging communities.

Developers are constantly stimulating demand, improving payment terms in the form of profitable payment deferral plans. This clearly provides more opportunities for implementation, attracting new consumers.

Dubai is ranked 18th in the list of luxury property prices. This indicates that Dubai is not an expensive city to buy real estate. For example, having $ 1 million, you can purchase 143 sq.m. luxury real estate in Dubai. Now let's compare how much sq.m. for the same amount can be purchased in other famous world capitals. In Monaco - 15 square meters, in London and New York - only 30 square meters.

For investment in real estate in the UAE, please contact our specialists.