Affordable Housing Gains Popularity in Dubai
According to Bayut.com, the UAE's largest property portal, localities offering affordable rental opportunities in the Emirate are rising in popularity.
The shift is largely due to the widespread development taking place and the jobs the projects are creating for a middle-tier income workforce mainly from South and Far East Asian countries, leading them to seek affordable housing to relocate to.
The portal notes 'Dubai apartment rentals declining in certain bed groups, while increasing in others. Average apartment rent in Dubai across all bed categories remained close to AED 138,000 (€34,200),' representing a 3% increase on average rents at the end of December 2015.
As demand for affordable rentals continues to rise, the yields available to investors have become increasingly attractive. Bayut.com report the average yield across the Emirate is estimated at just over 6% although yields of up to 10% are available, depending on location and build quality.
"In our month-on-month study, we found an average annual rents for studio apartments at about AED 59,000 (€14,620), a negligible 1% decrease compared to December 2015," the report states.
Despite some turbulence in the Emirate's property market, yields improved across all property sizes with studios achieving an average 7.23%; 1-bed apartments 6.4%; 2-beds 5.7% and 3-beds returning 5.3% of the unit cost in January 2015. The portal found that larger properties offered a minimum yield of 3.55%.
The most popular area for property buyers in Dubai remains the Dubai Marina, followed by Jumeirah Lakes Towers. The top three localities for renting apartments as of January this year are reported as being Bur Dubai, Downtown Dubai and Business Bay.
Construction in the Emirate has been in overdrive in recent years as investment is stepped-up ahead of the World Expo 2020, to be hosted in Dubai. Investment in the Emirate's hotel and leisure sector have proven particularly popular with foreign buyers and with significant capital being injected into Dubai's infrastructure there are many bargains to be found.
