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Sep 09, 2013

Gross rental yields are now attractive in Dubai, at up to 7.2%


Last Updated: Aug. 09, 2013
DUBAI - Apartments COST ($) YIELD (p.a.) PRICE/SQ.M. ($)
TO BUY MONTHLY RENT TO BUY MONTHLY RENT
60 sq. m. 270,120 1,467 6.52% 4,502 24.45
90 sq. m. 384,660 2,129 6.64% 4,274 23.65
120 sq. m. 604,440 2,932 5.82% 5,037 24.43
200 sq. m. 1,017,400 4,708 5.55% 5,087 23.54
Districts researched:
Downtown District : Downtown Burj Dubai
Marina Emirates Living District : Dubai Marina, Emirates Living, Discovery Gardens, Jumeirah Lake Towers
Palm Jumeirah: The Palm, Jumeirah
Source: Global Property Guide Definitions: Data FAQ See also: Update Schedule

Our rental yields research indicates that some good fundamentals underpin Dubai´s property market. Apartments in Dubai now sell for around USD 3,700 to USD 4,300 per square metre (sq m):

  • Medium-sized apartments (120 sq. m. and 160 sq. m.) sell for an average of USD 4,000 per sq. m.
  • Large apartments (225 sq. m.) cost more, around USD 4,300 per sq. m.
  • Smaller apartments (75 sq. m.) are cheaper, selling for around USD 3,700 per sq. m..

This is an unusual pattern - smaller apartments usually are more expensive than larger apartments (per sq. m.) in the other major world cities.

Rents from small and medium-sized apartments average USD 22 per sq. m. per month, while large apartments rent for a little less, at USD 21 per sq. m. per month. Looking from the landlord´s point of view, these rental levels mean that a 75 sq. m. apartment can earn rental income of around USD 1,700 per month, while 120 sq. m. and 160 sq. m. apartments can earn rental incomes of around USD 2,700 and USD 3,700 per month, respectively, and 225 sq. m apartments can earn a monthly rental income of around USD 4,800 per month.

In conclusion the gross rental yields, i.e., the gross returns on investment if the apartment is fully rented out, are moderate to good, range from 5.87% on large apartments, to 7.21% on small apartments, the difference stemming from the lower cost of the smaller apartments, in per sq. n. terms.






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