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Revealed: These Dubai areas offer the highest rental returns

Prevailing market trends, investment opportunities and growth strategies instilling confidence in stakeholders navigating Dubai's dynamic landscape

Apartments in Dubai Investments Park, Discovery Gardens and Liwan offer the best rental returns of up to 11 per cent to property buyers in the affordable category, according to the latest analysis by Bayut.

Dubai Sports City, Dubai Silicon Oasis, and Motor City have emerged as highly appealing choices, offering up to 10 per cent return on investment (RoI) based on projected rental yields for apartments.

Bayut’s first-quarter analyst revealed that Green Community, Al Sufouh and Damac Hills gave rental returns of over eight per cent, surpassing benchmarks established by the majority of global markets.

All these areas of Dubai offer much higher rental yields than all the major cities such as London, New York, Hong Kong, Mumbai and other cities where rental returns usually average four to seven per cent. More importantly, prime property prices are also much cheaper much more than in most of the global cities.

Haider Ali Khan, CEO of Bayut and head of Dubizzle Group Mena, said Dubai's real estate market remains promising despite ongoing global uncertainties, with prevailing market trends, investment opportunities and growth strategies instilling confidence in stakeholders navigating its dynamic landscape.

“The emergence of new master communities and innovative approaches to off-plan developments underscore Dubai's resilience and appeal as a real estate hub. As we confront the challenges and opportunities ahead, fostering collaboration and strategic planning will be pivotal in maximising returns and creating sustainable growth in Dubai's real estate sector,” said Khan.

In terms of villas, Bayut said buy-to-let villas and townhouses in International City exhibit an average RoI of over seven per cent, rendering it an appealing option for potential investors. Similarly, Damac Hills 2 and The Valley offer six per cent-plus ROI to investors. Mid-tier villas in Jumeirah Village Triangle, JVC and Mudon have projected ROIs ranging between six and eight per cent. In the luxury villa segment, The Sustainable City stands out with an ROI exceeding seven per cent due to the distinctive features of the properties and the limited market supply it offers. Al Barari and Tilal Al Ghaf present robust ROIs exceeding six per cent.

Up to 17% jump in rents

As per Bayut's data analysis, affordably priced apartment rentals increased from one per cent to 17 per cent, while mid-tier segment apartments jumped up to 12 per cent. Conversely, luxury apartment rentals have witnessed decreases of up to 4 per cent.

Reasonably-priced villas have generally become cheaper by up to 3 per cent, with rental houses in Mirdif recording upticks of one per cent to seven per cent. Mid-tier villa rentals have recorded increases in the range of two per cent to 17 per cent, with certain bed types in Jumeirah Village Circle (JVC) and Town Square reporting price decreases of under two per cent. Luxury villa rentals have surged by 13 per cent, although four-bedroom homes in Al Barsha and Damac Hills have become relatively more affordable by 12 per cent to 14 per cent.

Among those seeking affordable accommodations, Deira and Al Nahda have emerged as popular choices for apartments, while Damac Hills 2 and Mirdif have garnered attention for villas. In the mid-tier segment, Jumeirah Village Circle (JVC) and Bur Dubai apartments have been in high demand among tenants, whereas properties in JVC and Arabian Ranches 3 have attracted villa-seekers. In the luxury category, Dubai Marina and Business Bay have remained sought-after destinations for apartment rentals, while Dubai Hills Estate and Al Barsha have been favoured for high-end villa rentals.

“There is a noticeable resurgence in the demand for family villas. The market has witnessed a heightened interest in larger family-oriented residences, particularly within the luxury and mid-tier communities, indicating a shift towards more spacious properties and a preference for family-friendly living environments,” Bayut said.