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The UAE real estate sector remains a safe haven for investment

Rental returns stay strong in Dubai, Abu Dhabi

DUBAI, August 21, 2016

Dubai and Abu Dhabi, the UAE's leading property markets, continue to be safe havens for global realty investors despite a downward trend in prices, says a report.

Though rents have seen periodic adjustments, the UAE’s unique selling propositions such as a highly smart, diversifying economy, security of investment and the great promise of Expo 2020 will keep the real estate and its allied sectors thriving in the months to come, said the report from Bayut.com, one of UAE top property portals.

With average yields in July recording 5.6 per cent in Dubai and an attractive 7 per cent in Abu Dhabi, ample interest from genuine investors remained in the markets.

Investment in Dubai’s real estate sector in the first half of the year crossed Dh57 billion ($15.51 billion), and there was encouraging news coming out of Sharjah’s realty market as well - the city pulling in investment worth Dh12.1 billion ($3.29 billion) in the first six months of the year.

The real estate market in Abu Dhabi, as always, continued to lure investors with high rental returns on investment and a great promise of capital value appreciation, the report said.

DUBAI
In July 2016, Dubai’s real estate market remained strong with rental yields going as high as 6.5 per cent in select apartment categories. Overall, however, apartment rents were seen becoming more and more affordable with a total downward adjustment in July of 2 per cent. Average yield across all bed categories was recorded at 5.6 per cent.

The average rent for studio apartments in Dubai remained stable at Dh57,000 ($15,518) compared to the average studio rents in H1 2016. However, the average came down 6 per cent in a year-on-year analysis with July 2015.

The units returned an average rental yield of 6.3 per cent in July 2016, with the average rent for one-bed units recorded at Dh92,000 ($25,047) and rental yield hovering close to the 6.5 per cent mark. The average rent was 7 per cent less in July 2016 than the average rent in H1 2016.

Two-bed apartments fetched owners Dh145,000 ($39,476) in July after a downward adjustment of 3 per cent. However, rental yield remained attractive at 6 per cent. Commanding Dh206,000 ($56,083), average rent of three-bed units remained stable when compared with H1 2016 values, and the rental yield was 5.4 per cent in July 2016.

The largest apartments, the 4+ bed category, returned an average annual rent of Dh304,000 ($82,763) in July 2016, exhibiting a 2 per cent drop in value from H1 2016. Average yield for these units was recorded at 4 per cent.

Top localities for renting apartments in Dubai (July 2016): 1. Dubai Marina; 2. Jumeirah Lakes Towers (JLT); 3. Downtown Dubai; 4. Bur Dubai; and 5. Dubai Silicon Oasis.

Top localities for buying apartments in Dubai: 1. Dubai Marina; 2. Jumeirah Lakes Towers (JLT); 3. Downtown Dubai; 4. Palm Jumeirah; and 5. Business Bay.

ABU DHABI
For the month of July, the average apartment rent in the UAE capital was recorded at Dh126,000 ($34,303) per annum, a 6 per cent downward adjustment from the average rent recorded in the same period in 2015. Still, the average rental return remained at an attractive 7 per cent in July 2016, creating ample interest from genuine investors.

Compared to values calculated in July 2015, the average studio rent in Abu Dhabi dropped 5 per cent to Dh56,000 ($15,246) in July 2016, while rental values of one-bed apartments adjusted downwards by 6 per cent to Dh91,000 ($24,774). Two-bed and three-bed apartment rents fell to Dh129,000 ($35,120) and Dh172,000 ($46,826), respectively, registering decreases of 4 per cent and 5 per cent. The average rent of 4+ bed apartments also came down by 4 per cent to Dh247,000 ($67,245) on average in July 2016.

However, the drops in rental values were neutralised by the impressive yields (7 per cent on average) that the units in the capital offered. Studio apartments topped the yields chart by returning 7.4 per cent in July 2016, while one-bed and two-bed apartments returned yields of 7.3 per cent and 6.9 per cent, respectively. The average rental yield of three-bed apartments rose to 6.3 per cent, while the 4+ bed category returned an encouraging 5.5 per cent in rental yield during July 2016.

Top localities for renting apartments in Abu Dhabi (July 2016): 1. Al Reem Island; 2. Al Raha Beach; 3. Khalifa City A; 4. Al Muroor; and 5. Al Khalidiyah

Top localities for buying in apartments Abu Dhabi: 1. Al Reem Island; 2. Al Raha Beach; 3. Al Reef; 4. Saadiyat Island; and 5. Al Ghadeer - TradeArabia News Service




Tags: UAE | abu dhabi | Dubai | real estate |

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