Dubai guarantees maximum realty yields
| Dubai guarantees maximum realty yields |
As one of the rapidly expanding financial centres and stable economies
in the world, Dubai spells immense investment potential. The same holds
true for its realty market. The prices of properties here, both
residential and commercial, are relatively low in comparison with the
more established sectors of New York and Tokyo. But the rates of
appreciation in Dubai, both purchase and rental are among the highest
in the world, and these augur high yields for investors.The trend of rising realty prices is reflected in other emirates of the UAE, as well. According to the Consumer Price Index by the International Monetary Fund (IMF), housing prices in the UAE during 2003-2006 showed remarkable growth when compared to the prices of other commodities. |
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Consumer Price Index for UAE (2003-2006) |
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(*Source: UAE Authorities) |
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Currently, small apartments of 540 square feet in Dubai yield 10.2% of the total price as general demand for smaller units, especially studios and 1 bedroom apartments, is very high. Larger and spacious apartments generate lower yields comparatively, with 6.88% for 2,700 square feet. The average yield for apartments in Dubai is around 7%. As regards the prices of apartments, figures could reach up to US$897,000 for properties in the 2700 square feet range and average around US$3,900 for every 10.8 square feet. In this segment as well, smaller apartments have higher per square feet rates, at US$4,128 for 540 square feet. Their rental yields per square feet are also higher than bigger apartments. The returns will certainly go up as demand for apartments and office space in Dubai is on the rise. As per the present estimates, there is a huge gap between supply and demand for both residential and commercial properties in the emirate. |
| Rental yields in Dubai (September 2007) |
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| Apartment prices per square metre at major cities(US$) |
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(*Source: Global Property Guide) |
