Rental Yields Aiding Dubai, Abu Dhabi Property Markets in 2015

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According to property portal Bayut.com, the recent UAE-based Cityscape Global 2015 event held in September 2015 eased many Middle East property investor concerns, and cleared speculative clouds of a purported property demand slowdown in Dubai.
 
Bayut.com says the property show sent a clear message that Dubai's realty sector was strong and its demand was increasing by the day. The unprecedented foot traffic at the event showed investors still see Dubai with much interest.
 
Bayut.com also report that local developers banked on heightened rental yields and affordable prices of residential properties in Dubai. The unique combination made the new launches particularly attractive to investors and homebuyers, who were sure that the comparatively low prices of Dubai properties today should prove to be beneficial in the future.
 
The real estate of Abu Dhabi trudged on with a steady progress in September 2015. Property prices remained strong, while rental yields posted one of the best trends in the region.
 
Dubai
 
While many property experts expected property prices to decline in anticipation of the 25,000 imaginary units to be delivered in 2015, the month of September passed smoothly in Dubai amidst price stabilisation. Prices in some locations did experience a slight dip due to low transaction volumes, but rents remained strong on average and continued with their upward trends in the more popular locations of the emirate.
 
The low transaction volumes were due to the government increasing property transfer fee from two percent to four percent of the property value, but this never dampened rental demand in Dubai. The emirate's residential market offers average annual rental returns of over 7.2 percent of the property value, which is even higher than London's.
 
Top Apartment Renting Localities
 
Bayut.com further reports Dubai Marina retained its top position for another month and exhibited an 8% increase in interest in September 2015 compared with August 2015. Jumeirah Lakes Towers (JLT) followed with 5% more search hits in September.
 
Due to its affordable residential options, Dubailand overtook Downtown Dubai for the 3rd spot, generating 27% more search hits in September and gaining two positions to become the third-most popular locality for renting apartments in Dubai.
 
The lively environment of Bur Dubai allowed the locality to post an 18% increase in interest in September and retain the 4th place on the popularity index. Downtown Dubai, the home of Burj Khalifa, lost two places on the popularity index and fell to 5th place, but still generated 4% more search hits than it did in August.
 
The 6th place on the popularity index was secured by Business Bay, which gained one position with a 24% increase in interest in September compared with August 2015. Al Barsha dropped one spot and traded places with Business Bay after registering a 4% increase in interest to come in at 7th. Dubai Silicon Oasis maintained its 8th position on the popularity index after generating a 24% increase in interest among people looking for rental apartments in Dubai.
 
With a 15% increase in popularity, Mirdif gained one place on the popularity index in September 2015 to land in the 9th place. On the other hand, Deira gained two places and climbed to the 10th spot with a 14% increase in popularity.
 
Top Apartment Buying Localities
 
Dubai Marina continued to lead the popular localities for buying properties in Dubai for another month and generated a 2.9% increase in search hits in September compared with August 2015. Downtown Dubai followed with an increase of 0.3% in total search hits, while Jumeirah Lakes Towers retained 3rd place despite a 0.3% decrease in search hits in September compared with August.
 
Dubai Sports City was another locality that witnessed a minor dip in interest (0.9%) yet managed to retain its 4th spot on the popularity charts for another month. Even though Business Bay generated much interest among property buyers in September 2015 and saw a 19.6% increase in search hits, it remained in 5th place in September. Palm Jumeirah generated a 5.7% increase in search hits and retained the 6th spot on the popularity charts.
 
Meanwhile, Dubailand generated a 14.6% increase in interest and climbed three positions to land in the 7th spot. Jumeirah Beach Residence retained its 8th spot and had 4.7% more search hits in September compared with August.
 
Jumeirah Village Circle dropped from 7th place in August to 9th in September with a 4% decrease in search hits. Dubai Silicon Oasis experienced a decrease of 20.7% in search hits and ended up in the 10th spot on Bayut.com's popularity charts.
 
Abu Dhabi
 
The property market of Abu Dhabi found itself in the perfect position for mid to long-term investment in September. Owing to a constrained supply, residential rents rose and so did the prices. The Abu Dhabi Urban Planning Council also announced that it would be launching a new policy making allotment of 20 percent of all new residential projects to affordable housing mandatory for all developers. Despite the oil-price crunch, there has been no slowdown in the construction process of ongoing projects and some new launches are in the pipeline as well.

Top Apartment Renting Localities
 
Al Reem Island continued to dominate the popularity charts for another month and exhibited a 21.39% increase in search hits in September 2015 compared with August 2015. Al Raha Beach followed with 29.27% more search hits in September, while Al Khalidiyah retained the 3rd spot on the popularity charts with a 32.09% increase in search hits.
 
Generating a 23.11% increase in interest, Al Reef overtook Khalifa City A and climbed to the 4th spot in September. Despite dropping to 5th place, Khalifa City A witnessed a 7.55% increase in search hits. Al Ghadeer retained the 6th spot and generated a 23.62% increase in interest in September 2015.

Beating all odds due to the delivery of new units, Saadiyat Island received a whopping 102.11% more search hits in September compared with August and climbed six positions to land in the 7th place. Al Muroor retained the 8th spot on the popularity index by exhibiting a 27% increase in interest from tenants in Abu Dhabi.
 
The Corniche Area dropped two positions to 9th place, but still generated 4.2% more search hits than it did in August. Al Bateen was another top scorer that climbed three spots on the popularity index in September to land the 10th spot. The locality generated 61.22% increase in interest in September compared with August.
 
Top Apartment Buying Localities
 
The strained supply in Abu Dhabi continued to increase demand in September. The emirate offers some of the best rental returns in the country and is the safest place for property investment.

Al Reem Island maintained the top spot on the popularity charts for another month by generating an increase of 3% in search hits in September compared with August. Al Raha Beach and Al Reef also retained their 2nd and 3rd positions, respectively, generating 11% and 52.8% more search hits in September.
 
Generating an increase of 54%, Saadiyat Island overtook Al Ghadeer for the 4th spot, knocking the latter down to 5th place on the popularity charts with a decrease of 28.4% in search hits in September compared with August.
 
Following Al Ghadeer was Al Khalidiyah in 6th place, which saw a 27.3% increase in search hits and retained its position on the popularity index. The greatest increase in interest was experienced by the Corniche Area, which generated 110.5% more search hits in September compared with August and climbed two position to become the 7th-most popular locality in Abu Dhabi for buying properties.
 
Al Khubeirah retained the 8th spot on the list despite a 3.9% decrease in search hits in September. Danet Abu Dhabi also experienced an 18.5% decrease in searches and fell from 7th place in August to 9th place in September. Khalifa City A generated an increase of 25% in search hits and secured the 10th place on the popularity charts.
 
The property developers of Dubai and Abu Dhabi are now focussing on building mid-end affordable residential units. We believe the particular trend of developers addressing the imminent demand would not only strengthen the property market of both the emirates, but it would also lay to rest all fears that developers were only bent upon launching high-end luxurious projects.
 
Studies indicate numerous new affordable housing projects entering the market in the coming two years. We believe these properties would likely see a burst of new investment flowing into the UAE. Office and commercial spaces remained in high demand, depicting a healthy inflow of business to the county, in September.
 
"Although the activity in real estate sectors of both Abu Dhabi and Dubai has been slowed down by global factors, there is no shortage of positivity in the market. High-quality options that offer lucrative gains still remain in high demand," Bayut.com CEO Haider Ali Khan said.
 
The growing business and employment activity in Dubai and Abu Dhabi means resident population is on the rise and creating a persistent demand for housing and commercial spaces. And with economies offering professionals, businessmen and investors much more than once thought, Dubai and Abu Dhabi appear ready to face all eventualities.