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Revealed: Dubai areas with fastest rent increases, highest return on investment in 2024

Over the past four years, property prices and rents have soared across all segments, driven by growing population and investors seeking high returns

Published: Tue 7 Jan 2025, 6:00 AM

Updated: Tue 7 Jan 2025, 10:19 PM

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Affordable areas saw the most significant rise in rental prices last year, driven by increased demand from tenants seeking budget-friendly options due to a broader rent surge.

These areas not only attracted tenants but also offered strong rental yields for property owners and investors, thanks to the high demand. The convenient access to key locations of areas like Deira and Bur Dubai via the Dubai Metro and other public transport options further boosted the appeal of these affordable communities, making them especially attractive to budget-conscious residents.

According to the latest data released by Bayut, rents for affordable apartments have risen by up to 48 per cent, with the largest increase reported for 2-bedroom flats in Deira.

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Other popular areas for affordable rentals included Bur Dubai for apartments, and Damac Hills 2 and Mirdif for villas.

Villa rents also saw notable growth, with affordable options rising by up to 44 per cent.

As Dubai’s expat population is expected to exceed 4 million by 2025, the demand for housing is anticipated to keep rising, presenting exciting opportunities for the real estate industry. Dubai is firmly establishing itself as a global hub for both lifestyle and investment, and the coming years are set to redefine the market.

Mid-tier apartment rentals increased by up to 41 per cent while luxury apartment rents grew between 5 and 25 per cent last year.

The mid-tier villa rental market has also recorded upticks of up to 45 per cent, particularly for 4-bedroom units in Town Square, with more people desiring suburban properties in self-sustaining communities.

Jumeirah Village Circle (JVC) and Business Bay emerged as the top spots for mid-tier apartment rentals, while JVC and Town Square were preferred for villas.

Rising rents driven by growing population

For luxury properties, Dubai Marina and Downtown Dubai remained highly sought-after for apartments, while Dubai Hills Estate and Al Barsha dominated the villa market.

With the demand for high-end properties at an all-time high, upscale villa rentals surged by up to 60 per cent, with Jumeirah seeing the greatest increases, particularly for larger 6-bedroom units.

Over the past four years, both property prices and rents have skyrocketed across all segments—luxury, mid-tier, and affordable—driven by Dubai's growing population and the influx of foreign investors seeking high returns. As the demand for housing continues to rise, these trends are expected to persist. This will then create more opportunities across the real estate sector.

Highest RoI

Bayut’s data also revealed that affordable apartments in areas like Dubai Investments Park (DIP), Discovery Gardens, and Liwan offered the highest rental yields last year, ranging from 9 to 11 per cent. In the mid-tier market, communities like Living Legends, Motor City, and Al Furjan reported return on investment (RoI) above 8.7 per cent. Luxury apartments in Al Sufouh, Green Community and Al Barari have reported rental yields between 7 per cent and 9 per cent.

In the villa market, Dubai Industrial City, International City, and Damac Hills 2 led the affordable segment, with RoIs exceeding 6 per cent. Mid-tier villa communities such as JVC, Al Furjan, and Jumeirah Village Triangle saw returns between 6 and 8 percent. Luxury villa communities including The Sustainable City, Al Barari and Tilal Al Ghaf recorded RoIs exceeding 6 per cent, Bayut added.

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