An Introduction to Dubai’s Powerful Real Estate Yield
Dubai is known for having one of the top yield rates in the global real estate market, with an annual yield rate hovering between 6 and 9 percent. This is typically 2 or 3 percent more than averages in other real estate markets around the world.
In comparison to the highly successful markets of New York, London, Sydney, and Paris, Dubai performs exceedingly well for its investors. Gross rental yields in London, for example, are lower than 3.5 percent, often less than half of Dubai’s yield rates. This is one of the reasons Dubai is an increasingly popular buy-to-rent market for real estate investors.
Dubai is also the fourth-most-visited city in the world, surpassed only by Bangkok, Paris, and London. In addition to this, the city boasts more affordable real estate than many other cities in its league. Because of these and other factors, Dubai has one of the fastest population growth rates among the major cities around the world, usually between 5 and 8 percent. It is also a major hub of both international business and employment growth. In a matter of just two decades, Dubai has made a name for itself as one of the most successful places in the world for real estate, business, and tourism.
There are a number of important factors that contribute to Dubai’s leading position in world real estate yields. Recently, price corrections have helped to grant even greater yields to property holders than in years past, making property prices decrease by 20 to 30 percent as opposed to the much slower drop in rental properties. This has enabled buy-to-rent investors to gain higher yields than in the past.
The city has also tightened regulations to better serve the needs of both investors and renters. These include things like mortgage caps and lowered registration fees. Such actions have boosted the UAE’s reputation as a solid, growing market, further incentivizing investors who may have been previously on the fence and encouraging current owners to increase their investments.
Because of the increasing demand, the city’s real estate opportunities are continually expanding. A wide variety of opportunities exist for investors to gain a foothold in residential units that can be leased for either short- or long-term contracts, giving a wide degree of flexibility to property holders and renters alike.