Dubai property boom: Best rental yields, price increases amid $24bn market
09 May 2023, Arabian Business
The booming Dubai real estate market continues to offer strong returns for investors and landlords, with property prices and rental yields increasing.
Property portal Bayut has published its Dubai Property Market Report for the first three months of the year, revealing the most searched areas in the emirate’s real estate sector as well as data on the neighbourhoods with the most impressive returns.
Price increases in the Dubai’s property sector favour sellers and landlords.
Dubai property boom
Sale prices have surged by up to 24 per cent in the first three months of the year, while luxury villas have seen rental increases of up to 89 per cent.
Based on data released by the Land Department, Dubai recorded 30,767 residential property sales transactions worth AED87.9bn during Q1 2023.
The Marina was the most searched-for area for luxury apartment sales in the city, said Bayut. The average sales price-per-square-foot for flats in Dubai Marina has increased by 12.5%, averaging at AED1,529 during Q1 2023.
The luxury villa sector has seen similar growth in the early months of 2023. Palm Jumeirah has been the top choice for investors interested in buy-to-let luxury villas in Dubai, during Q1 2023. The sales price-per-square-foot for villas in Palm Jumeirah has averaged at AED3,711, following an increase of 23.3 per cent.
The more modest International City neighbourhood, however, has seen the most attractive return on investments for landlords, with an average rental yield of 9.16 per cent.
While International City has seen the best rental yields, the largest price increases in the property market have been seen in upscale villa neighbourhoods.
Umm Suqeim has emerged as the top choice for luxury villa rentals in the city. The asking rents for houses in Umm Suqeim have experienced upticks of up to 50 per cent across all bed types. In Q1 2023, the average rent stood at AED271k for four-bed, AED315k for five-bed and AED474k for six-bed units.
Potential tenants have also shown an inclination toward the expensive villas in Dubai Hills Estate, Palm Jumeirah and Arabian Ranches 2. These districts have reported price increases of up to 89 per cent, with landlords pricing their properties higher to benefit from increasing demand.
Haider Ali Khan, CEO of Bayut and dubizzle and the Head of EMPG MENA said: “I think there is absolutely no doubt that Dubai is experiencing a property boom unlike any other, while leading global economies are reeling under financial strains.
“Backed by a growing economy full of opportunity, not only has Dubai become a brand to be reckoned with, thanks to the safety, infrastructure, government support and overall positive outlook of the emirate, the city has also very successfully strengthened its hold as a popular metropolis, everyone in the world wants to be associated with.
“It feels like a lot of talented people from all walks of life across the globe are making their way to Dubai, resulting in an obvious demand for real estate in the city.
“Interest for lease and sale in various communities is on the rise, with traffic growing every month. We are attracting more than 7m visits each month for properties in Dubai alone on Bayut, and the number just keeps growing by the day, which shows how much trust and demand there is for the Dubai real estate market.”