The annual rental yield for properties in the UAE has reached approximately 8%, coinciding with the UAE’s rise to the top of preferred real estate investment destinations in the Middle East, Invest-Gate reports.
Experts and industry officials attribute this to the country’s stability, quality of life, and attractive business environment. Local real estate market returns are the highest compared to similar global markets, significantly contributing to the market’s recovery, investment growth, and accelerated development and construction pace.
According to a recent report from the Central Bank of the UAE, sales prices in Abu Dhabi accelerated by 3.9% year-on-year in October. Rental averages continued their upward trend, showing a 0.8% increase quarterly and a 2.6% increase annually in the third quarter and October 2023, following a 0.5% annual increase in the second quarter of 2023.
This resulted in an average rental yield of 6.2% in the third quarter of 2023, remaining stable compared to 6.3% in October.
Moreover, in Dubai, average rents increased by 12% annually in the third quarter of 2023, slowing to a 5.7% annual increase in October. This led to an average rental yield of 8.8% in the third quarter of 2023, with no significant change from the 8.7% recorded in October.
Furthermore, Alaa Masoud, a real estate marketing expert, noted that the rental yield in the country reached around 8% in 2023.
Despite the challenges of 2023, real estate expert Hassan Elshazli expects the sector to maintain its growth and recovery in 2024, driven by external and internal factors, including economic initiatives attracting capital and talent.
Additionally, innovative measures, such as residency law amendments, have supported the real estate sector, increasing new investments.
Hassan Elshazli, Chairman of SODIC Property Services Co., highlighted the sector’s ability to maintain momentum and achieve strong investment returns of around 8% in 2023. He attributed the notable increase in rental and sales prices to limited supply and substantial cash flows from high-net-worth individuals.
