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Dubai Yields Remain Strong Despite Rents Falling

Dubai yields are still strong for overseas property investors, despite rents continuing to fall in the Emirate.

According to estate agent Chestertons, Dubai yields can still be found between 6 per cent and 9.5 per cent in popular communities. This compares to average yields of below 5 per cent in other global cities such as London and Hong Kong.

Like any market, Dubai’s property sector has had its ups and downs amid global economic fluctuations since 2008.

Rental rates in 2008 were much higher than today with a rapidly expanding workforce and economy. But the global financial crisis sent rents tumbling in 2009, and they remained subdued until 2012 as some recovery emerged.

Market confidence rose again in 2013, when Dubai won the bid to host Expo 2020 and they peaked in 2014 before a combination of low oil prices and a strong US dollar marked the beginnings of a correction.

There has been a steady fall in rental rates in the following years as additional supply continued to outweigh demand.

However, although no area is totally immune from market dynamics. But there are some which stand out compared with others when it comes to Dubai yields.

With around 40,000 new units predicted by Savills to become available this year, it is important to choose your area carefully when purchasing property, to ensure that you receive those strong Dubai yields.

However, some great deals are available on Dubai property, as developers compete to interest overseas property investors.

Andrew Cleator, luxury sales director at Luxhabitat, said: ‘This year we should see the larger conglomerate developers focus more on their under-construction master communities with units still in the pipeline; Dubai Hills Estate and Dubai Creek Harbour to name a couple.’

Property investors can still enjoy strong Dubai yields, as long as they get the right purchase deal in the right area.

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