The UAE topped the list of the largest markets in the world in terms of rental returns for residential properties, according to international indicators of real estate and commodity prices. Residential properties in Gulf and Arab countries also occupied advanced positions in their attractiveness to international investors.
Real estate developers confirmed the competitiveness of Gulf and Arab real estate, especially UAE real estate, in terms of attracting capitalists, investors and those seeking freehold ownership, in light of a number of factors, most notably the high rental returns ranging between 6% and 9% annually, in addition to the competitiveness of development companies in developing the largest projects with the most luxurious residential units in the world that attract wealthy people and celebrities.
As well as thanks to the availability of additional elements such as stability, attractive living and work, and legislation stimulating the freehold movement of real estate. The real estate market in the UAE establishes an average rental return ranging between 6% and 9% for residential units.
It comes first globally according to the semi-annual data for 2024 in the “numbeo” index, while the index also shows global competitive rates in other Gulf markets, as both the Omani and Qatari markets record an average investment return rate for real estate of 7.5% annually, while the average rental return is 6.3% annually in other active destinations such as Saudi Arabia and Egypt.
Residential real estate in the region in general has come to outpace, in terms of investment value and competitive ownership opportunities, many attractive Asian real estate investment destinations such as Hong Kong and Singapore and a number of European destinations such as Iceland, Switzerland, Ireland, the Netherlands and Norway, in addition to the United States market.
The index data, on the other hand, shows clear competitiveness in ownership prices in these destinations, starting at a minimum of over $300 per square meter and reaching a price ceiling of $2,900 for small apartments, while starting at less than $600 and up to $4,500 per square meter for larger three-bedroom apartments.
Masoud Al Awar, CEO of Midalton Investment Consulting, said that the real estate market in the UAE has become a major driver in the attractiveness of regional real estate for investment movement, with investment returns clearly rising as the highest returns globally, compared to competitive prices for ownership prices and rental values that are witnessing continuous growth with increasing demand, which pushes investment returns towards increasing.
The latest data from the Expatistan platform, which specializes in monitoring the prices of goods and services around the world’s markets, shows that there are high rental values in the region in the UAE, starting at an average of $1,000 per month for small units and $2,200 for large family apartments, while prevailing prices in the Arab world start at an average of $200 for small units and reach $2,700 for large units. He added that the factors of societal stability and enhancing the attractiveness of living through investment and residency laws and expanding the scope of freehold ownership in the local market have made UAE real estate in particular the most attractive globally for wealthy people, celebrities and those looking for high-value investment opportunities.
The development of the local business environment and the stability of business owners and projects have increased demand for local real estate, which has strengthened its position against active regional business destinations. He added: The market is establishing diverse alternatives for real estate investment in light of the continuation of major projects, which is reflected in the indicators recorded for the local real estate sector in the UAE.
Real estate companies are currently developing 30,000 new housing units in the UAE, most of which are residential apartments, according to recent indicators from JLL, a real estate research company, while data on real estate projects registered with the Department of Municipalities and Transport in Abu Dhabi showed that there are nearly 7,000 new housing units with international specifications that have been offered in the emirate’s market alone since the beginning of the year, which reflects the clear demand for ownership.
In turn, Dr. Mubarak Al Ameri, a real estate sector specialist in the UAE, pointed out that the real estate sector locally, in the Gulf and in the Arab world has become the most competitive globally in attracting investors, especially with the tremendous momentum and diversity established by the huge residential real estate projects currently under construction in many countries, most notably the local market, Saudi Arabia in the Gulf and the Egyptian market in the Arab world.
Saudi Arabia, the UAE and Egypt account for more than 90% of the total residential real estate investments under construction in the Middle East currently, according to the latest Knight Frank index data, reflecting the extent of the huge real estate projects witnessed by these active destinations.
Al Ameri identified several features that enhance the competitiveness of real estate in the UAE and the region in general compared to other markets, including high rental returns and attractive ownership prices offered by real estate developers for new residential units compared to purchase prices in many international markets, in addition to economic components and flexibility of systems and laws.