Return on investment for UAE real estate remains high
The UAE real estate market is still attractive for investors looking for strong returns, despite a dip in both sale and rental prices in Dubai and Abu Dhabi
The UAE real estate market is still attractive for investors looking for strong returns, despite a dip in both sale and rental prices in Dubai and Abu Dhabi.
According to a recent report by Bayut.com, the average property prices in H1 2017 marked a 7% decrease compared to H2 2016 in Dubai.
Though both the rental and sales markets in the city are exhibiting a downward trend, the average ROI in Dubai has remained relatively consistent at 4.7%, compared to 4.9% at the end of 2016.
The most popular communities in Dubai for rent in H1 2017 were Dubai Marina, Dubai Silicon Oasis, and Jumeirah Village Circle.
In Abu Dhabi, Al Reem Island, Khalifa City, and Mohamed Bin Zayed City remain key areas for investor interest, with overall average ROI in the capital remaining strong at 5%.
The Bayut.com report highlights that the average property prices in Abu Dhabi have decreased with declines limited to lower single digit percentages.
Studio apartments in Abu Dhabi, however, have not been subject to the same fall in prices as larger units and have instead seen a 2.2% increase in prices.
The report also indicates that the UAE real estate market has witnessed a balancing act in the first half of 2017, with the decrease in rental prices keeping ROI consistently stable.
Haider Ali Khan, CEO of Bayut.com, said: “Over the past years, the market has gradually matured, and as this progression has taken place, investors need more credible information regarding the housing market, and we are working diligently in doing our part by presenting the information.”
Experts believe that despite continued fall in property and rent prices, continued investment in infrastructure, diversification of the economy, and Expo 2020 preparations will result in an upward trend in prices in the next few years, the report added.