Dubai Silicon Oasis (DSO) apartments offer the best gross rental returns in Dubai at 9.5 percent, according to the latest Property Finder Trends report.
The average rental yield in global property hotspots such as London (2.7 percent), Hong Kong (2.4 percent), New York (2.9 percent) and Singapore (2.5 percent) hover in the low single digits while Dubai properties consistently offer over 7 percent gross returns on average.
Rental yields, one of the most important considerations for mid to long-term investors, is the rental income (the money a tenant pays to the landlord) divided by the purchase price of the property.
In the first half of the year, DSO proved the most lucrative, while new communities such as Meydan and Damac Hills offered gross rental yields of 9.3 percent and 8.9 percent respectively.
Investor favourites such as International City (8.4 percent), Dubai Sports City (8.4 percent), International Media Production City and Arjan (both at 7.6 percent) continued to offer good returns for buyers.
Among villa and townhouse communities in Dubai, Town Square offered the highest gross returns at 7.8 percent in H1 2019, the ‘Trends’ report added. This was followed by The Springs (6.6 percent), Reem – Mira (6.4 percent), Mudon (6.3 percent) and Jumeirah Village Circle (6.2 percent).
Luxury villa communities such as Palm Jumeirah Signature Villas, Palm Jumeirah Garden Homes, Emirates Hills, Jumeirah Islands and Mohammed Bin Rashid City offer smaller yields ranging between 2 to 4 percent.
“Despite a sustained contraction in prices, Dubai still holds its own as an investment hotspot with attractive yields and new legislative initiatives to further entice investors and companies,” said Lynnette Abad, director of data and research, Property Finder.
The affordable community of Al Reef leads in terms of offering Abu Dhabi’s gross rental yields for both apartments and villas/townhouses at 8.5 percent and 6.7 percent, respectively.
Apartments in Al Ghadeer (8.3 percent) and Al Raha Beach (7.2 percent) also find favour with investors while villas and townhouses in Al Raha Gardens (5.7 percent) and Golf Gardens (5.5 percent) are also popular with those looking to make a rental income.
Apartments in Ajman’s Emirates City provided the UAE’s best gross rental yield at 11 percent. Al Hamra Village in Ras Al Khaimah (9 percent) and Ajman Downtown (8 percent) also provided apartment buyers with robust rental returns.
Meanwhile, villas in Ajman’s Al Mwaihat (6 percent), Al Hamra Village in RAK (5.2 percent) and Al Zahraa in Ajman (4.9 percent) rounded up the top three list of best gross returns.