UAE property provides substantially higher rental yields than properties in New York, London, Singapore, and Hong Kong, according to a report by real estate listings portal Property Finder.
Despite sales prices and rents softening in the first half of the year, the UAE including Dubai consistently offers overseas property investors higher rental yields of more than 7 per cent on average.
This compares to average rental yields in New York standing at 2.9 per cent, London 2.7 per cent, Singapore 2.5 per cent and Hong Kong 2.4 per cent.
Lynnette Abad, director of data & research at Property Finder, said: ‘Despite a sustained contraction in prices, Dubai still holds its own as an investment hot spot with attractive yields and new legislative initiatives to further entice investors and companies.’
Nick Witty, managing director of Chestertons Mena, agreed, saying: ‘Since the change in UAE regulations regarding short-term lettings, we have seen a rapid increase in popularity with single and portfolio landlords alike.’
He continued: ‘With increasing demand for short-term lets and holiday homes, particularly in the run up to Expo 2020, these types of lets are achieving between 25 per cent and 40 per cent higher rental yields when compared with traditional longer-term leases.
Craig Plumb, head of research, Mena at JLL said residential yields in Dubai have remained largely unchanged at 6.5 per cent to 7 per cent over the past 12 months.
He said: ‘The higher rental yields in Dubai compared to more established markets such as London, New York and Singapore reflects the additional risks involved in Dubai, where vacancies levels are higher.’
Dubai Silicon Oasis apartments provided the highest gross rental returns in Dubai at 9.5 per cent in the first half of the year, compared to 9.2 per cent a year ago.
New communities such as Meydan and Damac Hills also offered gross rental yields at 9.3 per cent and 8.9 per cent, respectively.
Overseas property investors looking for higher rental yields should continue to consider the UAE.