Average Rental Yields of Dubai Properties Compared to the Rest of the World

Every sensible individual would try to create a second income source instead of depending on only one as nothing in this world can be more relieving than being financially stable.

Such comprehension of financial stability has induced investors to buy property in real estate in order to attain financial affluence and emotional security.

Currently, investors in real estate are gaining the best rental returns in Dubai, which are amounting over 7% annual returns.

Before rushing into a buying decision make sure to read:
Top 5 Mistakes For First Time Homebuyers In Dubai 2019

This upsurge in rental yields will continue to see an increasing trend mainly due to Emirate’s growing domestic population and the migration of outsiders that are renting Dubai apartments and villas in the long term.

If you are buying property in Dubai with the intention of deriving income from it, the average rental yield is the most important factor you may want to consider.

What are Rental Yields?

The money that the tenants pay is known as the rental income. When this rental income is calculated as the percentage of the property’s value, it becomes the Rental Yields. This is calculated in the following equation:

• Total annual rent ÷ property purchase price = gross rental yield
• Total rent – property expenses ÷ by property purchase price = net rental yield
• Lastly, multiply the result by 100 to get the net rental yield percentage.

Rental yields are increased or decreased depending on various practical factors.

For instance, small properties were seen to derive larger rental yields than smaller ones. Landlords have witnessed the higher rental yields from apartments than villas, and have made more profit by renting studios than large apartments.

Rental Yields in Dubai compared to the rest of the world:

Rental investment in Dubai has brought good fortune to many investors by offering the best residential rental yields in the world. The UAE real estate has produced the highest rental yields from June 2017 – 2018 compared to the rest of the world, making Dubai the most favorable place for property investment.

The rental prices in the UAE market have stabilized in recent years and yields have increased as there has been no major constraint.

According to Global Property Guide, the average rental yield in Dubai is 7.1%, whereas the rental yields have decreased in London with 3%, Hong Kong with 2.82%, India with 2.22%, and Singapore with 2.83%.

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According to Propertyfinder
Arjan offers UAE’s best rental yield of 12.4%

Arjan topped Average Rental Yields Of Dubai Properties list with 12.4% gross returns while investor favorite International City improved to 10.1% from an already high 9.2% due to healthy demand from those migrating from other emirates

Read the full overview about this project in Arjan that comes with a 9 year payment plan:

• International City offers over 10% gross rental yield due to healthy demand from those migrating from other emirates
• In Abu Dhabi, affordable communities outperform the more expensive ones

Among the villa and townhouse communities, Town Square offered the highest gross returns at 7.2%, followed by Mudon at 6.8% and Reem – Mira at 6.7%.

Dubai is in need of expanding their housing to meet the demands of the growing population. Keeping the vast business and economic growth in sight, the government has already started to offer residential property incentives to help keep up with the demand.

Expansion in business and job growth will increase the demand for residential and commercial spaces in the future, both to accommodate business and families in this luxurious city, which is pushing property prices to rise higher.

2020 is foreseen to bring a high return on rental yields and open the doors to massive cash flow in rental investment in Dubai for the long term due to the much awaited Dubai Expo event, which will increase the oil prices, developmental activities in infrastructure and create new job opportunities in the real estate.