Dubai Leads The Arab World In Real Estate Investment Returns
26 March 2023, Globe Echo
The Emirate of Dubai topped the Arab region in the rate of investment return on the purchase of real estate, according to the global “numbeo” index for measuring commodity prices, which showed clear competitiveness for the country’s real estate in achieving profitability compared to other markets at the regional level, as it has become a preferred destination for capital owners to buy real estate ahead of many From the surrounding and attractive markets in Asia, Africa and Europe, based on the profitability rate achieved against the value paid and the amount of capital invested by buyers.
The real estate market in the UAE is currently witnessing competition between developers to establish attractive prices for capital, as local price monitoring indicators reported that there is relative stability in real estate purchase prices in the Dubai market without noticeable changes compared to prevailing prices during the last quarter of last year, at a time when the minimum price has shrunk. The selling prices of real estate in the Abu Dhabi market increased by about 7% during the first quarter of this year, in light of the competitiveness of developers and the increase in the volume of units offered in the market, with the entry of many residential projects under construction that have completed their construction work.
Numbeo data on real estate sector prices showed a clear momentum achieved by UAE real estate in general in comparison to purchase prices and the value achieved from re-leasing units in light of rental rates prevailing in free real estate investment areas, as its attractiveness clearly competes with active international markets such as Singapore, Hong Kong, Iceland and Switzerland. The United States and Ireland.
Average return
According to the index data, the average annual return on real estate reached 9% in Dubai, whether in terms of real estate within the city center or in other regions of the emirate, while Abu Dhabi also came at an average of 8% in terms of the achieved return, as it activates the performance of real estate, especially in buying areas. Aliens.
Indicators of platforms and institutions specialized in monitoring the local real estate sector, including “propertyfinder”, showed that the market continued to maintain, until the end of last February, the high levels of rental yield ceilings that it reached at the end of last year, as the prevailing average rental yield in Dubai ranges between 5 and 9%, depending on the geographical distribution of regions. Investment, particularly Dubai Investments Park, Jumeirah, Mohammed bin Rashid City, Dubai Hills Estate, Dubai Harbor, Dubai Marina, and others.
Abu Dhabi real estate
The rental return on Abu Dhabi real estate for the first period of this year ranged between 3 and 8.5%, within 6 main investment areas that allow the purchase of free real estate for both citizens and foreigners, including Al Reem Island, Yas Island, Al Raha Beach, Al Reef and Saadiyat” and “Masdar” area. And the monitoring of sales prices stated that the minimum price per square foot in Abu Dhabi real estate has now decreased to 650 dirhams, compared to 700 dirhams 6 months ago, specifically at the beginning of the last quarter of 2022, while the highest ceiling for the square foot price reached about 2,200 dirhams in the most expensive real estate areas. in prices.
According to the prevailing prices since the beginning of this year, the price of a one-room apartment starts from 560 thousand dirhams, reaching the highest price of about 2.5 million dirhams, while the price of a two-room apartment starts from 750 thousand dirhams to reach about 4.3 million dirhams. At the same time, the prices of three-bedroom apartments start at around one million dirhams, while the maximum price ceiling reaches 7 million dirhams.
