Dubai apartment rental yields stay strong

03.04.2016
Bayut analytics recorded rental yields growth across all Dubai areas in February.

At the background of downward tendencies at the Dubai property sales market, realty developers in Dubai are trying to masterly manipulate the supply in accordance with demand. Although, there is probably no urgent need in reducing the number of sales offers, other experts including imexre.com believe, for the demand is formed naturally with population growth, thus developers just being over precautious.

One way or another, but curbing some excessively active developers has produced an effect. According to Bayut data, apartment rental segment in Dubai returned to growth rates in February. Bayut recorded an average increase of rents by 0.32% for all types of housing. Thus, many hopes for rent getting cheaper didn’t come true. But investors can be sure they will be guaranteed an average of 6% for any Dubai property’s rental yields, and an average of 7.6% for studio apartments.

According to Bayut’s research, average apartment rents across all bed categories returned an increase of 0.32%, while average property yields remained at an encouraging 6% mark.

Bayut’s database showed that studio apartments are in greatest demand among investors, for that category regularly offers the highest rental yields of an average 7.6%, while 1-bed and 2-bed apartments returned yields of 6.7% and 5.8%, in that order. Rental yield of 3-bed apartments rose to 5%, while 4+ bed category, which is usually less wanted, nevertheless returned a 3.2% yield on average.

Other analysts also agree. “Overall, apartment and villa rental yields have increased around 10 per cent and 7 per cent, respectively when compared year-on-year. Since investors look for better rental yields, the real estate market here has remained attractive for investors,” Reidin Data & Research Manager – UAE Ozan Demir said in his recent interview.

Dubai's economy is growing, the city is expanding, and its population increases, thus the emirate is unlikely to face a decline in rental demand in the coming years. A more even distribution of population across the city areas will be ensured with the Dubai Metro Red Line extension in the near future, both speeding up the demand for rents in the remote residential developments and leading to property prices growth in Dubai’s suburbs in a couple of years.

The future of Dubai’s real estate is bright and prudent investors are enthusiastically investing in promising real estate developments in Dubai. Are you amongst them?

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