Affordable Apartment Investment on the Increase in Dubai

A great bet for investors in Dubai lies in apartments, as they have appreciated in value by 35% in the five years up to February 2017. This is in sharp contrast to apartment values in Abi Dhabi which have stalled at 2012 levels, according to data from Reidin-GCP consultancy.

While the best returns right now are from Dubai apartments, it’s worth looking at the future of both markets. It’s also interesting to note that returns on investments in villas remains very similar in both areas, due to the general decrease in investment for luxury real estate.

Strong start to 2017 for Dubai

What makes Dubai the better option for apartment returns? Well, the real estate market as a whole in Dubai has seen a strong start for 2017 thanks to more investment interest from India, Saudi Arabia and China.

A sales high of AED12 billion was reached in the first two weeks of the year, and the Dubai Land Department (DLD) predicts deals worth AED292billion by the end of 2017. This is an increase of around 20% on 2016. These projections have been backed up by new economic figures showing an expected growth of the economy by 3.1% (up from 2.7% last year).

Apartments yield higher returns

An average yield for real estate in Dubai outweighs the yield from more mature markets such as London and Paris, sometimes by as much as 3%. And although investors have always been attracted by Dubai’s potentially high yield return, in 2017 the focus has moved from luxury properties to simpler apartments. The ever-increasing number of ex pats coming to work and live in Dubai means people are simply looking for good investments to live in, as well as to rent out and this is going to continue to be the case.

Saudi investment on the up

As well as an increase in investors from India, Dubai is also extremely attractive to Saudi investors. This is down to the stability of the currency as well as a the wider range of properties available and the fact that off-plan projects are easily available to buy. The stability between the UAW dirham and the Saudi riyal has allowed investors from Saudi to benefit, particularly when compared with investors from the UK or Russia who have been dealing with the appreciation of the US dollar.

Positive economic future

Forecasts suggest that property prices in Dubai will remain relatively stable in Q2 of 2017, and should rise towards the end of the year as more investors arrive from all over the world. As there are lots of properties due to be completed and delivered in time for the World Expo 2020, it certainly seems that 2017 is a good year for overseas investors to invest in apartments in Dubai.

Samir Salya

Samir Salya is the Chairman of Reign Holdings, and is involved in UK and UAE real estate and construction. Samir holds over 20 years of experience in executive management, business expansion, performance improvement, sales and marketing.