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When it comes to purchasing property for rental purposes, investors are presented with various markets, each offering its own unique advantages. The UAE and Thailand are two popular destinations that attract attention due to their favourable investment conditions. However, to make an informed decision, it is essential to understand where property purchases are likely to be more profitable.
In the UAE, particularly in Dubai, property provides attractive rental yields. This region is renowned for its stable economy, low taxation, and strong demand for housing from both locals and expatriates. Additionally, the government actively supports investors by offering residence visas for property purchases, adding further value to the investments.
On the other hand, Thailand appeals to investors with its affordable property prices and year-round tourist influx, especially in popular locations such as Bangkok, Phuket, and Pattaya. The country is also a major draw for tourists, ensuring a constant demand for rental properties, particularly during peak seasons.
When comparing these markets, it is crucial to consider not only the potential rental yield but also other factors such as the legal environment, taxation, growth prospects, and infrastructure quality. In this article, we will delve into the advantages and disadvantages of purchasing property for rental in the UAE and Thailand to help you make the right choice.
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The Thai property market for foreign investors
Bangkok, the capital of Thailand, has repeatedly been recognised as one of the most popular tourist cities according to Airbnb. Unlike European resorts such as Spain, Greece, and Turkey, where the tourist season lasts no more than six months, Thailand attracts visitors year-round. This means that rental properties are in constant demand, reducing the risk of losses for investors during the off-season.
It is also worth noting that Bangkok ranks high in the Airbnb short-term rental ratings. The annual tourist flow to Thailand is around 30 million people, and this figure continues to grow. Apart from Bangkok, the most popular tourist destinations in Thailand include Phuket, Pattaya, Samui, and Hua Hin.
Phuket stands out as the second most important tourist hub in the country. The construction of a new international airport on the island, already approved by the authorities, indicates the growing popularity of this destination. Pattaya attracts holidaymakers with its sandy beaches, vibrant nightlife, and wide range of entertainment options.
On the island of Samui, located in the Gulf of Thailand, building regulations prohibit the construction of structures taller than palm trees. Most buildings on the island, including bungalows and hotels, do not exceed 2–3 storeys in height, preserving its unique architectural character. Hua Hin, Thailand’s long established and widely recognised royal resort, is ideal for a peaceful family holiday.
The gross rental yield in Thailand also remains attractive to investors. As of Q3 2024, the average return is 6.27% per annum, higher than the Q4 2023 figure, which stood at 5.79%.
The rental yield across the most popular areas is as follows:
| Location and Number of Bedrooms | Price (USD) | Rent (USD) | Yield |
|---|---|---|---|
| Bangkok, Watthana | |||
| Studio | 113,855 | 542 | 5.71% |
| 1 Bedroom | 176,204 | 813 | 5.54% |
| 2 Bedrooms | 406,354 | 1,627 | 4.80% |
| 3 Bedrooms | 712,083 | 2,440 | 4.11% |
| Pattaya, Jomtien | |||
| 1 Bedroom | 95,309 | 545 | 6.86% |
| 2 Bedrooms | 195,793 | 1,089 | 6.67% |
| Phuket | |||
| Studio | 80,403 | 463 | 6.92% |
| 1 Bedroom | 109,022 | 545 | 6.00% |
| 2 Bedrooms | 258,926 | 1,499 | 6.95% |
| 3 Bedrooms | 586,427 | 2,726 | 5.58% |
Advantages of UAE real estate for international buyers
Purchasing property in the UAE for rental purposes offers several significant advantages:
- High profitability.
- No taxes on property or rental income.
- Stable economic growth.
A constant influx of tourists ensures a steady demand for rentals. The well-developed infrastructure and high level of safety make the UAE an attractive destination for expatriates.
The market of real estate in Dubai offers considerably higher rental yields compared to major cities like London, New York, and Hong Kong. The average return on investment (ROI) in Dubai ranges from 5% to 9%, depending on location, property type, and investment duration. In 2023, prices for luxury apartments in Dubai saw an impressive growth of 17.4%, 2.2% higher than the global average.
In numerical terms, the yield coefficient is as follows:
| Location and Number of Bedrooms | Price (USD) | Rent (USD) | Yield |
|---|---|---|---|
| Apartments in Development Projects in Dubai | |||
| Downtown Dubai | |||
| Studio | 397,495 | 2,155 | 6.51% |
| 1 Bedroom | 612,578 | 3,176 | 6.22% |
| 2 Bedrooms | 1.06 mil | 4,992 | 5.64% |
| 3 Bedrooms | 1.77 mil | 7,941 | 5.38% |
| 4 Bedrooms | 6.81 mil | 22,688 | 4.00% |
| Palm Jumeirah | |||
| Studio | 408,385 | 2,609 | 7.67% |
| 1 Bedroom | 947,154 | 3,970 | 5.03% |
| 2 Bedrooms | 1.63 mil | 5,785 | 4.25% |
| 3 Bedrooms | 3.08 mil | 7,373 | 2.87% |
| 4 Bedrooms | 14.43 mil | 21,553 | 1.79% |
| Dubai Marina | |||
| Studio | 353,934 | 1,815 | 6.15% |
| 1 Bedroom | 471,004 | 2,609 | 6.65% |
| 2 Bedrooms | 762,319 | 4,015 | 6.32% |
| 3 Bedrooms | 1.29 mil | 6,239 | 5.79% |
| 4 Bedrooms | 2.72 mil | 9,415 | 4.15% |
| Business Bay | |||
| Studio | 299,482 | 1,701 | 6.82% |
| 1 Bedroom | 462,836 | 2,269 | 5.88% |
| 2 Bedrooms | 735,093 | 3,403 | 5.56% |
| 3 Bedrooms | 1.16 mil | 4,991 | 5.15% |
| JLT | |||
| Studio | 258,644 | 1,474 | 6.84% |
| 1 Bedroom | 430,166 | 2,268 | 6.33% |
| 2 Bedrooms | 653,416 | 3,153 | 5.79% |
| 3 Bedrooms | 878,053 | 4,537 | 6.20% |
| JVC | |||
| Studio | 185,134 | 1,247 | 8.08% |
| 1 Bedroom | 279,090 | 1,701 | 7.31% |
| 2 Bedrooms | 431,255 | 2,609 | 7.26% |
| 3 Bedrooms | 564,462 | 3,176 | 6.75% |
| Arjan | |||
| Studio | 176,967 | 1,055 | 7.15% |
| 1 Bedroom | 292,721 | 1,701 | 6.97% |
| 2 Bedrooms | 443,778 | 2,268 | 6.13% |
| Al Furjan | |||
| Studio | 147,699 | 1,134 | 9.21% |
| 1 Bedroom | 270,682 | 1,633 | 7.24% |
| 2 Bedrooms | 411,592 | 2,223 | 6.48% |
| Abu Dhabi Apartments | |||
| Al Reem Island | |||
| Studio | 177,729 | 1,248 | 8.43% |
| 1 Bedroom | 245,031 | 1,588 | 7.78% |
| 2 Bedrooms | 421,998 | 2,155 | 6.13% |
| 3 Bedrooms | 598,938 | 2,946 | 5.90% |
| Saadiyat Island | |||
| Studio | 340,321 | 1,089 | 3.84% |
| 1 Bedroom | 544,512 | 2,075 | 4.57% |
| 2 Bedrooms | 1.03 mil | 3,630 | 4.21% |
| 3 Bedrooms | 2.26 mil | 4,991 | 2.65% |
| Al Raha Beach | |||
| Studio | 272,257 | 1,361 | 6.00% |
| 1 Bedroom | 326,708 | 1,815 | 6.67% |
| 2 Bedrooms | 501,361 | 2,722 | 6.52% |
| 3 Bedrooms | 735,093 | 3,823 | 6.24% |
| 4 Bedrooms | 871,222 | 4,537 | 6.25% |
| Yas Island | |||
| Studio | 231,415 | 1,361 | 7.06% |
| 1 Bedroom | 326,708 | 1,815 | 6.67% |
| 2 Bedrooms | 544,514 | 2,950 | 6.50% |
| 3 Bedrooms | 664,307 | 3,176 | 5.74% |
Conclusions
The choice of the investment destination depends on numerous factors, including personal circumstances and preferences, making it impossible to definitively identify the most attractive option. Statistical data clearly demonstrates that the profitability of property in the UAE reaches up to 9%, higher than in Thailand. However, the initial investment amount for purchasing in the Emirates is generally higher as well. Investments in Dubai developments are considered safer due to government protection. Additional advantages of the UAE include a wide selection of freehold properties, low down payments for instalment purchases, and the ability to utilise mortgage financing. Detailed information on current prices for apartments and villas in Dubai is available on our website.
