Known as the realtor’s destination of the world, Dubai is fast growing in the field of rental properties all over the world. The Dubai real estate market is fast changing its stance from an ownership-based mindset to providing properties that will provide the highest rental yields for the prospective buyers in the coming time.
Why This Shift in the Market?
Rental yield is the ratio of rent received by the landlord to the purchase price of the given property. The real estate communities in some of the major areas of Dubai offer the highest yields in the world.
This has attracted a lot of interest from real estate investors all over the world, and the race to acquire a rentable studio apartment has already heated up in the past few years.
Millennials are often pointed as the cause for this huge disruption in the industry as well. With more of them moving towards rental apartments, over owning a property, rental spaces have gone much higher in demand.
The Magic of Dubai’s New Communities
While the gross average return lies somewhere around 3-4 percent consistently around the world, Dubai’s communities are known to offer returns up to 7 percent consistently since the past few years, especially the new communities that have emerged lately.
People are looking to invest much more in off plan properties in Dubai in anticipation of higher returns in the future. Real estate dealers are taking advantage of this fact and try to bring a much more luxurious lifestyle at affordable costs to their customers.
Communities such as Al Reef are considered to offer the highest rental yields for all types of units in the development . Several new projects by Emaar and other top developers have cropped up in the place in a small period, making it a hotspot for both investors and tenants.
While the new communities in Dubai have managed to attract a number of tenants as well as property investors, it is the traditional communities that are bearing this loss. Many high-end builders have expressed their concerns over the rental yields and prices to be down this year.
Hence, while this has supported the growth of entry-level opportunities for tenants as well as the sales market force, it is the traditional business which is feeling the impact of this change across the country.