Landlords Association Recent Landlord News Does Dubai still offer the best real estate returns in 2020?

Does Dubai still offer the best real estate returns in 2020?

dubai property investment 2020

Dubai’s real estate may offer the best returns

Real estate in Dubai offer yields between 7% and 10.5%, according to the Property Finder Trends report, which has recently been published.

Property agents have reported, a slight increase in UK landlords investing in Dubai. The UK government has published guidance for UK investors, should they wish to buy property in the UAE. See link at the bottom of this page. With recent UK tax changes and more regulation for landlords to contend with, some UK landlords are looking to invest elsewhere. Dubai does seem to be an option for some UK investors.

The Dubai real estate values may have hit rock bottom. This, for some investors, is good news; it may be an excellent time to buy.

Dubai verge of the future

Dubai is the city of tomorrow or the city that stands on the verge of the future. The success formula of business, especially the real estate market, has many factors weighing in including its location, tourism attractiveness, high investment yields, and many others.

Zhann Jochinke, chief operating officer of Property Monitor, says: “there are 50,000 new units from projects already under construction that will hit the market in early 2020, with apartments making up the majority of the upcoming supply.

Investors and owner-occupiers alike are displaying an interest in purchasing properties – a factor that helps lift markets from the bottom – with November 2019 marking one of the strongest months in the past decade. A total of 5,025 sales were recorded with off-plan (Oqood) registrations representing 60.8%, notably higher than the year-to-date monthly average of 55.4%. Residents will definitely look at buying a home rather than renting one as prices have become more attractive”.

Some international investors believe real estate is a good long-term investment in Dubai. Since 2002, Dubai has become a hub for real estate investors. This is because the tourism industry is flourishing, and continues to hold a larger share in the country’s GDP.

Elaine Jones executive chairman, Asteco Property Management said: “The ownership structure and the ability to buy income-generating property at a good yield without capital gains tax and property tax represent excellent opportunities for international investors”.

Generally, yields in Dubai are regarded, as being some of the best in the world. More mature communities such as Dubai Marina, Downtown Dubai and the Palm Jumeirah respectively,” said Lynnette Abad, director of data & research, at property Finder.

Dubai Marina is a thriving business hub

Dubai Marina is a flourishing business hub, with grounds decorated by breath-taking towers. According to Property Finder, it has consistently ranked number one since 2011, as one as the most sought areas for property investors.

When it comes to new communities, Town Square yields the highest gross rental yield at 7.6%, followed by Mudon at 7.3% Reem at 6.4%and JVC at 6.3%.

In Dubai, the affordable community of Al Reef offers the highest gross rental yield for apartments at 8.8% Apartments in Al Ghadeer 7.8% are also sought-after by international investors.

Apartments in Ajman’s Emirates City provided the UAE’s second-best gross rental yield at 10.5%. Ajman Downtown 8.7% and Al Hamra Village in Ras Al Khaimah 8% also provided apartment buyers with outstanding rental returns.

Meanwhile, Al Hamra Village 6.3% and Mina Al Arab 4.7%, both in Ras Al Khaimah, offered the best gross yields for villas/townhouses.

Dubai is still expanding rapidly; another new airport is going to be built in South of Dubai. New commercial and business hubs, and the anticipated major hospitality projects constructed to occupy a vast number of tourists expected to visit Dubai.

Average returns for London stands at 2.9%

Average gross rental yields in London stands at 2.9% Hong Kong 2.35% Sydney 2.85% Singapore 3.3%and Toronto 3.9% while Dubai properties offer 7% and upwards, gross returns on average.

UK Government guidance on buying real estate in Dubai

British Landlords Association

Author: Marc Attwater

Date: 29th of February 2020

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