The property market in Dubai has become one of the most vibrant and attractive places for investment globally. The property market is booming, and with a world-class infrastructure, the absence of property tax, an open, friendly legal framework, and scorching demand for property by all residents and expats, it has become an attractive option to invest in properties in Dubai by foreign investors, especially Australians, who are beginning to look at this market. One of the most common options is rental revenue, particularly in areas where it is in high demand.
Not every place in Dubai is equally profitable. The topic of this blog is the best locations to invest in Dubai property to achieve high rental returns, taking into consideration recent trends and the performance of this property, as well as tenant demand.
The reasons why Dubai Property is desirable to investors
Before immersing in the high-achieving regions, it is worth knowing the reasons why Dubai property keeps attracting more and more interest in terms of appeal to the global audience:
- Property tax-free: Unlike most Western markets, Dubai does not impose an annual property tax, making it particularly attractive to long-term investors.
- Good ROI: The returns on investment in Dubai can reach as high as 6-10%, compared to Sydney or London.
- Strong economy and infrastructure: With robust tourism and a thriving business hub, supported by strong infrastructure, there is an increase in long-term demand for tenants.
- Regulatory protection: The Real Estate Regulatory Authority of Dubai (RERA) in the city provides transparent laws and protections for tenants and landlords.
To an Australian investor, the property in Dubai presents a good alternative or supporting portfolio of investments due to the prospect of higher returns and the relatively low cost of entry, which is lower than in major Australian cities.
Jumeirah Village Circle (JVC)
Mean Gross Rental Yield: 7 risk 8 %
The Jumeirah Village Circle is one of the most discussed communities by property investors. JVC is a combination of affordability and lifestyle, only minutes away from the New Dubai Marina and Dubai Downtown.
The reason why it is ideal: The area features a blend of studio apartments, one-to-three bedroom apartments and townhouses with reasonable prices. It is home to young professionals and small families, offering modern amenities and well-developed infrastructure.
- Tenant demand: The demand for tenants is high due to the location’s proximity to schools, parks, and major highways.
- Rentals need potential: Good and steady, particularly 1-bedroom apartments.
JVC is one of the ideal places to purchase a property if you are a budget-minded investor who requires stability in rental income.
Dubai Marina
Mean Gross Rental Yield: 6-7 %
The Dubai Marina is an exclusive waterfront community renowned for its vibrant atmosphere, luxurious skyscrapers, and famous landmarks.
The reason it is perfect: It appeals to both tourists and long-term tenants (mostly professionals) due to its proximity to Media City, Internet City, and JLT.
- Tenant demand is very high due to its walkability, nightlife, and connectivity.
- Rental potential: The studio apartments and 1-bed apartments in Dubai Marina are good options in terms of rental income (both short and long term).
When it comes to the highest quality, value is a long-term capital gain and secure rental returns; you cannot go wrong with Dubai Marina.
Business Bay
Mean Gross Rental Yield: 6.5-7.5 %
Business Bay is located in the centre of Dubai, often referred to as the Manhattan of the Middle East. It has a combination of business towers and luxurious apartment accommodations.
Why it is perfect: Next to Downtown Dubai, the Burj Khalifa, and the Dubai Mall. Executives and digital nomads are interested in the area.
- Rent demand: Strong, particularly by professionals in the area of work.
- Rental potential: High returns on mid-sized apartments, driven by an upsurge in furnished apartments.
Business Bay has been one of the most suitable places to invest in Dubai, with an investor considering high rental income and the longevity of tenants.
Dubai Silicon Oasis (DSO)
Mean Gross Rental Yield: 7-8 %
The free-zone technology park, Dubai Silicon Oasis, encompasses a well-planned residential community.
Why it is ideal: It is suitable and very affordable for families as well as working individuals due to the affordability of property and increased activity in the technology startup sector.
- Tenant demand: Medium to high, and employees and students in the tech industry show further interest.
- Potential to earn rental income: Above average, particularly in 2-bedroom apartments and family villas.
DSO offers low-cost, high ROI, making it an ideal choice for investors seeking value-for-money investments in Dubai property.
International City
Average Gross Rental Yield 7.5% – 9%
International City is one of the most cost-effective areas in Dubai, as the rent is affordable; however, it is highly preferred due to its convenience.
What makes it so perfect: The low values of property and the demand level by working-class dwellers and employees of small business establishments as tenants.
- Tenant demand is exceptionally high, driven by affordability and location.
- Rental income potential: The highest in Dubai, particularly for the studios and 1-bed apartments.
If you are keen on maximising your rental income, then International City is likely to be one of the top locations in Dubai, offering high rental returns.
Downtown Dubai
Mean Gross Rental Yield: 5-6.5 %
The city of Downtown Dubai is the luxury capital of Dubai, housing the Burj Khalifa and the Dubai Mall.
Why it is a dream: A luxurious location, tourist sites, and high-end living provisions.
- Tenant demand is high among executives and short-term tourists.
- Possibility of rental income: furnished rentals can pay better, and short-term ones (Airbnb, holiday lets).
Although the entry level is steep, Downtown Dubai offers good rental revenues and unbeatable long-term returns on investment to luxury-oriented investors.
Arjan (Dubailand)
Mean Gross Rental Yield: 7 % to 8 %
Arjan is an emerging community within Dubailand, located just beside Al Barsha South and near Miracle Garden.
What is so perfect about it: Affordable prices, emerging buildings, and infrastructures that are child-friendly.
- Tenant demand: On the rise, particularly in families and medical practitioners because of the availability of hospitals and schools nearby.
- Rental Income potential: Impressive, and so are the one and 2-bedroom units.
The fact that more projects are being executed in Arjan has increased its popularity among Dubai property investors, as they seek high returns.
How to Maximise a Rental Income in Dubai
To enjoy maximum out of your investment in a property in Dubai:
- Prefer to have furnished: Furnished places, especially those in high-occupancy areas, tend to attract more rent and occupants.
- Choose short-term rentals: Places such as Downtown and Marina could generate significantly more revenue through short-term leases annually.
- Find a local property manager: A local provider that oversees the building helps an overseas investor to source a tenant, achieve legal compliance and carry out maintenance.
- Keep laws in mind: RERA laws are subject to change from time to time. Ensure that your lease documents and listings are compliant with all relevant regulations.
Summary
Dubai is one of the few cities in the world that presents high returns on rental investments, investor-friendly policies, and innovative developments within the city. No matter what you want to achieve – capital growth, regular rental returns, or a combination of the two – it is vital to select the right areas in Dubai.
Whether it is affordable real estate, such as International City and JVC, or high-end options like Marina and Downtown, a Dubai property suits each investment plan.
With many Australians turning to offshore investments as a way of diversifying their portfolios, Dubai has remained a hot destination in real estate and a great source of income.
