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Shifting sands: UAE rental yields skyrocket to twice major markets

Shifting sands: UAE rental yields skyrocket to twice major markets

By Hamish McDougall

While property prices in Singapore are starting to rebound, and the ultra-prime real estate market in particular is showing growth in 2019, it’s the rental yields in the UAE that are catching the attention of international property investors.

Following years of decline in both property prices as well as rentals in Dubai and Abu Dhabi, rental yields have turned around and are now commanding more than double that of major markets such as New York, London and Paris – and also Singapore. Over the last 12 months, rental yields in the UAE averaged 6-7%, per Moody’s Investors Service, with yields topping out at an astonishing 12.4% for apartments in Ajman.

All this optimism does come with a note of caution, however…

In the next 12-18 months, we expect prices and rental yields to fall as a large amount of new supply comes into the market and demand remains soft.

Lahlou Meksaoui, Assistant Vice President at Moody’s

Nevertheless, it’s well above average rental yields in Singapore, which peaked at 5% all the way back in September 2008 and have been scratching around 3.2% through 2018.


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