Improvement in real estate investment returns in Dubai in 2022
The high turnover and high demand for Dubai real estate by foreign and local investors reflected positively on the investment return due to the improvement in sales prices in the past year and the increase in turnout, especially by foreign and wealthy investors who felt security and stability in Dubai, in addition to the attractive prices of real estate units that generate an attractive return compared to other destinations Others in the world, with expectations of an investment return exceeding 9 percent by the end of this year.
The founder and CEO of Al Rowad Real Estate, which specializes in real estate consultancy and marketing, Ismail Al Hammadi, said that the high rate of investment return on the emirate’s real estate is justified, the first of which is the significant rise in sales, which is evidence of the great demand for foreign investors for their confidence in the emirate’s real estate and its ability to give them a rewarding return on investment compared to In competitive cities, and secondly, the attractive prices of real estate, which are expected to improve during the current year, and third, the attractive investment environment of laws and legislation that favored Dubai over others.”
Al Hammadi added, "The investment return on UAE real estate is among the highest in the world, as the rate in competing cities ranges between 3 to 4 percent, and the most expensive is up to 5 percent, while in Dubai it ranges between 6 to 8 percent," adding, "Luxury housing exceeds The seven percent and offices 5 to 6 percent."
Al Hammadi expected the return of investment on the emirate's real estate to levels before the Covid crisis to 9 and possibly 10 percent, given the positive economic expectations regarding the growth of the economy of the emirate and the country as a whole.
Al Hammadi stressed that the local real estate market, with everyone's agreement, is heading to a new phase of growth and improvement at all levels, backed by the government's package of measures taken in the past two years and the confidence of local and foreign investors.
Al Hammadi stressed that the improvement in sales and the improvement in investment returns are a motivating reason for real estate development companies to return to launch new quality projects that serve global demand, especially as the Dubai market attracts new investors entering the market for the first time.
He pointed out that the demand for real estate is concentrated in the current and upcoming period on ready-made properties of villas and apartments, in addition to the demand for commercial and retail properties in light of the great activity of the retail and trade sector and the entry of new companies and new investors to the local market.
According to international valuation companies such as Moody Agency for Investment Services, the investment return on real estate in cities competing with Dubai ranged between 2 to 3 percent in cities such as London, Paris, New York and Hong Kong, while in Bangkok it amounted to about 4.5 percent, Singapore 2.5 percent, and Montreal 5 percent. .
Al Hammadi explained that Dubai has been known over the past twenty years as the best and highest place for investment returns on real estate, as real estate investment offers a better financial value per square meter compared to others, noting that the return before the Corona period ranged between 8 to 9 percent. In some areas, it reached 10%
and the value of real estate sales exceeded 151.07 billion dirhams at the end of last year, the highest in 12 years.
According to specialized real estate reports, Dubai Sports City topped the highest return on investment with 7.18% for affordable apartments.
Dubai Marina continued to provide the best return on investment for luxury apartments with an average of 5.64%.
While the affordable villas in Jumeirah Village Circle recorded good attractive rental returns of 5.9%, and residential villas in Arabian Ranches achieved excellent rental returns of 5.28%.
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