Looking at the new report brought out by Al Masah Capital, Dubai, Abu Dhabi and Qatar (despite the soft market conditions) still offer better returns on real estate investment compared to other destinations with matured investments.
Even though the dollar is currently on the decline (losing its strength), investors are still picking up assets in dollar-pegged economics. Thus making it costlier for emerging markets’ investors. However, the current yields on apartments are in the range of 8% while villas ranges around 6%. These figures puts Dubai above London (which is about 4%).
“Additionally, it is supported by growing population and the rise in the expats coupled with the upcoming Expo in 2020,” the report adds.
Abu Dhabi apartment rental yields could be “As high as 10 per cent. A property law introduced in January 2016 has also made buying properties more transparent”.
“While some of this spending (on infrastructure and related projects) is likely to be scaled back, the majority of announced projects are likely to proceed. Considering the need to prioritise government spending, projects revolving around these mega events (such as Expo 2020 and World Cup 2022 in Qatar) could suck in capital and resources at the expense of other projects” the report adds.
In Dubai, developers are confused o their sale strategy ad haven’t selected one for the year. But however, the aim is for the overseas investor targeting upscale assets or stick with selling to domestic buyers.
“The UAE’s residential sector is undergoing rationalisation as the country witnesses another wave of job cuts within government, oil and gas and financial services sectors” the Al Masah Capital report notes.