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Dubai, Abu Dhabi see surging realty demand, high ROI

Some of the most significant rent increases in recent years were in areas like Dubailand and Al Barsha

Published: Thu 29 Feb 2024, 5:48 PM

Updated: Thu 29 Feb 2024, 5:49 PM

By
Issac John

Business Bay witnessed the highest increase in average rental prices for luxury apartments, with a rise of 21.05 per cent. — File photo

Dubai and Abu Dhabi real estate markets are witnessing sustained strong demand backed by high rental yields, according to a study that paints a picture of a resilient and dynamic real estate sector, offering a range of opportunities for investors, residents and tourists alike.

The study released by a leading property platform reveals that demand for affordable villas and luxury apartments in Dubai continues to surge, while Abu Dhabi offers increased value on rents and high ROI (return on investment).

Primary data gathered by dubizzle from site visits and user behaviour in 2023 showcase positive trends across the board, driven by the UAE’s strong economic outlook and attractiveness as a place to live and work.

“Our 2023 Annual Property Market Reports for Dubai and Abu Dhabi not only highlight dubizzle’s leading position among real estate platforms but also shed light on the booming nature of the UAE’s leading property markets, “ said Haider Khan, CEO of dubizzle.

He said the data gathered from property seekers who generated over 77 million page views for listings on dubizzle for Dubai and nearly 14 million page views for Abu Dhabi in 2023, provides further evidence that the UAE’s property market is going from strength to strength, the report said.

The report highlights 2023 as the ‘Year of Affordable Villas’, with Dubai residents renting standalone homes in greater numbers. Affordable villa rentals increased by 16.64 per cent, with Damac Hills 2 emerging as the most popular affordable area for villa rentals, with an average yearly rent of Dh96,000. Other areas like Mirdif, JVC, and Dubailand also maintained a steady popularity, offering villas with annual rents below Dh200,000. Al Barsha, meanwhile, remained popular with those wanting larger, private spaces, boasting an average annual rental price of Dh388,000, followed by Jumeirah and the newer Dubai Hills Estate.

Some of the most significant rent increases in recent years were in areas like Dubailand and Al Barsha with 42.54 per cent and 31.08 per cent spikes respectively. JVC saw a rise of 32 per cent in the average year rent for apartments, and Damac Hills experienced a substantial increase of 66.67 per cent in annual rental prices.

“The trend for luxury apartments held sway in 2023, with Dubai Marina maintaining its status as the top luxury area for apartment rentals, with average annual rents surging to Dh148,000. Business Bay and Downtown Dubai also saw substantial increases in average yearly rent for apartments. Business Bay witnessed the highest increase in average rental prices for luxury apartments, with a rise of 21.05 per cent. Downtown Dubai became the third most popular area for apartment rentals, with an average annual rent of Dh214,000 in 2023, indicating a growing demand for high-end living in Dubai,” said the report.

Jumeirah Village Circle emerged as the top choice for affordable apartments, followed by Dubai Silicon Oasis and International City. In contrast, luxury flats in Dubai Marina, Business Bay, and Downtown Dubai garnered the most attention. Liwan and Green Community led the list with impressive ROIs of 9.46 per cent and 9.49 per cent, respectively based on projected rental yield.

Damac Hills 2 has emerged as the top area for affordable villas in Dubai, followed by Dubailand and Jumeirah Village Circle. Meanwhile, with an overall increase of 14.37 per cent, Dubai Hills Estate has become the most-searched area among buyers interested in luxury villas.

According to the report, Abu Dhabi is the only emirate where popular areas registered rent decreases, making it an appealing destination for those looking for more affordable rents. Areas such as Al Mushrif, Al Raha Gardens, Yas Island, Khalifa City, and Al Khalidiya all experienced drops in rental prices.

Luxury living is making a mark in Abu Dhabi, with Al Reem Island witnessing a 5.33 per cent increase in average annual rent for luxury apartments. This trend indicates a growing demand for high-end living spaces. Other areas, including Al Raha Beach and the Corniche Area, also saw significant increases in luxury apartment rentals, further solidifying the city’s appeal for luxury lifestyles. Yas Island and Saadiyat Island are also gaining traction for luxury apartment rentals.

When it comes to ROI, Abu Dhabi guarantees the highest rates. Al Mariyah Island led the way for luxury apartments with a 10.21 per cent ROI, while Al Reef offered an 8.1 per cent return for affordable apartments. Masdar City and Al Ghadeer also provided attractive returns at 7.39 per cent and 7.05 per cent respectively for affordable apartments. For those interested in affordable villas, Hydra Village offered a healthy 6.88 per cent ROI. Al Reem Island also presented an attractive 6.54 per cent return for luxury apartments, the report said.