OPSStandpoint_38_July_2017

Which are the best areas for investment in Dubai?

Presently, Dubai’s Real Estate Market is undergoing a period of steadiness. This year, Dubai Land Department (DLD) data shows somewhat healthy transactional activity so far. This has been due to tactical governmental guidelines such as amendment in registration fees and also mortgage caps which currently makes Dubai a good city to invest in. During 2016, investment in Dubai’s real estate market crossed AED 57 billion and there has also been encouraging news regarding Sharjah’s real estate sector with investments worth AED 12.1 billion. However, Abu Dhabi’s real estate market has always continued to pull in investments with promising rental returns and good capital value appreciation.

Keeping in view the current net returns on investment in apartment categories in Dubai, it is going somewhere around 7–9 percent. This is a higher value than any other developed country. When it comes to investing, yield returns are always based on many factors such as location, connectivity, maintenance and security which influence the investment returns throughout the year. In 2016, for studio apartments, the average rent remained at around AED 57,000 and for one bed units, it was recorded at AED 92,000 with rental yield close to 6.5 percent. However, two bed apartments remained at AED 145,000 after a 3 percent downward adjustment. The rental yield remained steady at 6 percent. The rent for 3 bedroom apartments was recorded at AED 206,000 while the rental yield was found to be 5.4 percent. The larger units with 4 bedrooms gave owners AED 304,000 with rental yield of 4 percent.

So, considering your investment appetite, if you want to rent an apartment in Dubai, the top five localities are;

  1. Dubai Marina
  2. Dubai Silicon Oasis
  3. Downtown Dubai
  4. Jumeirah Lakes Towers (JLT)
  5. Bur Dubai

These prominent locations promise high rental returns and also have good occupancy rate. However, if you plan to buy an apartment in Dubai, your tip 5 options should be;

  1. Palm Jumeirah
  2. Business Bay
  3. Dubai Marina
  4. Downtown Dubai
  5. Jumeirah Lakes Towers

However, if you plan on investing in off-plan projects, the return on investment goes with the market growth. This involves a little research. The yield is predicted on future market efficacy. So it is always safer to look for reliable projects. Moreover, before investing, it is better to study the community surroundings along with the payment plan.

According to recent findings, during the global economic crisis, UAE’s real estate market’s performance continued to inspire trust in foreign and local investors. Both Dubai and Abu Dhabi are considered to be safe havens from investment point of view. Additionally, the increasing prospects of Sharjah’s real estate market also provide another promising venue for investment. Apartment rents have seen periodic ups and downs but UAE’s diversified economy, investment security and the upcoming Expo 2020 will keep its real estate and related sectors thriving and flourishing in the months to come.

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