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Over the past few years, the Dubai real estate sector has become the most sought-after investment platform in the world. A variety of tax and visa privileges, the relatively low cost of properties, and high rental yields make investing in real estate in Dubai profitable for both residents and foreign investors. There are plenty of neighborhoods in Dubai with high investment potential. In this article, you will find out which neighborhoods of Dubai to invest in in 2024.
Content:
- Mohammed Bin Rashid City
- Dubai Marina
- Business Bay
- Downtown Dubai
- The Palm Jumeirah
- Dubai Hills Estate
- DAMAC Hills
Mohammed Bin Rashid City
MBR City is one of Dubai’s mixed-use freehold areas, a ‘city within a city’ with all the necessary urban infrastructure, including international schools, shopping malls, landscaped green spaces, sports areas, and an artificial lagoon with a waterfront.
MBR City provides an attractive environment for developing business and innovative technology. Favorable housing payment schemes in off-plan developments allow buyers to receive financial support of 80% for both completed and off-plan projects in Dubai. What’s more, developers provide bonuses and incentive programmes. The investment return on residential property in MBR City reaches an average of 8%.
Large-scale residential and commercial projects in MBR City are being developed by the Emirate’s best developers: Emaar and Meraas Holding. Sobha and Azizi Developments offer upscale and budget development projects in Dubai in this location, including new residential complexes such as Mediterranean Villas, Sobha Hartland, Azizi Riviera, and Azizi Victoria.
Dubai Marina
Dubai Marina is a well-known waterfront community that is one of Dubai’s freehold areas. The neighborhood mainly consists of apartment complexes with first-class residences, offering panoramic views of the marina. The real estate market in Dubai Marina is very active, with consistently high prices and strong demand for housing.
Known as a resort in Dubai, Dubai Marina appeals to a large number of tourists and long-term tenants who are impressed by premium, luxurious apartments, scenic waterfront views, and proximity to most of the emirate’s key attractions. Buying an apartment in Dubai in the Dubai Marina community will be profitable for investors who plan to earn passive income on a rental property.
You can see the ROI for apartments in the neighborhood in the table below.
| Apartment Type | ROI (%) |
|---|---|
| Studio | 6.4 |
| One-bedroom | 6.2 |
| Two-bedroom | 5.7 |
| Three-bedroom | 5.3 |
| Four-bedroom | 4 |
| Five-bedroom | 4.5 |
The table below shows the ROI for villas in Dubai Marina.
| Villa Type | ROI (%) |
|---|---|
| Two-bedroom | 3.2 |
| Three-bedroom | 4.1 |
| Four-bedroom | 4.2 |
| Five-bedroom | 5.2 |
Business Bay
Business Bay is one of the most sought-after business hubs in the emirate. Most of the properties here are office and commercial buildings. However, there are also a number of residential complexes in the district.
With about 18,000 companies operating in Business Bay and virtually no parks or children’s playgrounds being there, apartments in this district are ideal for single professionals, office workers, and business people.
Investors in Business Bay invest primarily in real estate for their own residence or for rent. Small apartments are in demand. The annual rental return on investment is expressed as a percentage below:
- 6% ‒ studio apartments;
- 5.8% ‒ one-bedroom apartments;
- 5.1% ‒ two-bedroom apartments.
Downtown Dubai
The mixed-use and high-tech community of Downtown Dubai is an excellent platform for investment in real estate. Buying property in Dubai in Downtown Dubai means relishing an exclusive lifestyle in the heart of the emirate, enjoying breathtaking views from the windows, and being able to choose your dream residence from a range of offers that are unique in their own way.
In Downtown Dubai, there are many offices, headquarters, and branches of large companies that employ foreign nationals. Most of them seek to rent a comfortable apartment nearby. The growing number of tourists in Downtown Dubai is also increasing the demand for local residences, which generates additional income for homeowners.
The return on investment in the Emirate’s housing stock varies depending on the type of property. You can see the annual rental yields for Downtown Dubai in the tables below.
You can see the ROI for apartments in Downtown Dubai in the table below.
| Apartment Type | ROI (%) |
|---|---|
| Studio | 5.9 |
| One-bedroom | 5.1 |
| Two-bedroom | 4.7 |
| Three-bedroom | 4.3 |
| Four-bedroom | 4.7 |
| Five-bedroom | 4.1 |
From the data in the table, we can conclude that the most profitable rental options in Downtown Dubai are studios and one-bedroom apartments.
The table below shows the ROI for villas in Downtown Dubai.
| Villa Type | ROI (%) |
|---|---|
| Two-bedroom | 3.7 |
| Three-bedroom | 3 |
| Four-bedroom | 3.3 |
| Five-bedroom | 5.2 |
Villas in Downtown Dubai have a lower yield than apartments in apartment buildings. The two-bedroom villas in Dubai show the highest return of 3.7%, while the return of two-bedroom apartments reaches 4.7%.
The Palm Jumeirah
The Palm Jumeirah is a man-made archipelago on the Persian Gulf, which offers properties to suit every taste: from land plots and apartments to villas and penthouses. The island is a sought-after investment area, since most of the local infrastructure facilities are tourist-oriented. It has the world’s highest infinity pool, plenty of Michelin-starred restaurants, gorgeous beaches, and a wide range of leisure activities.
The Palm Jumeirah is a resort area that attracts about four million tourists annually. It is also an exclusive multicultural residential area that is called home by 80,000 people. The archipelago is one of the world’s most recognizable locations. The unique status of The Palm Jumeirah ensures a stable demand for local housing and its high liquidity, so investing in island real estate will be a sensible and potentially profitable investment.
In The Palm Jumeirah, you can make money off short-term and long-term rentals. By choosing the right location and the right property, you can generate a profit of up to 15% per year. Since the prices for apartments in Dubai in The Palm Jumeirah are constantly rising, if necessary, you will be able to resell the purchased property with a greater profit.
Dubai Hills Estate
The landscaped residential area of Dubai Hills Estate offers a unique environment for living and doing business. The residential development of the same name, surrounded by shopping centers, golf courses, and a large park, is in high demand among families with children and highly paid professionals. Villas and apartments in the community are among the most investment-worthy properties in Dubai. Dubai Hills Estate is located within the larger MBR City area discussed above. However, it needs to be specifically mentioned, because the ROI figures in it differ from those of neighboring communities.
A massive concentration of high-end residential properties (apartments, penthouses, elegant villas and townhouses), sports centers, spas, parks and gardens, as well as the area’s convenient location relative to the Emirate’s main throughways attract many residents of the country searching for rental housing in Dubai Hills Estate.
You can see the ROI for apartments in Dubai Hills Estate in the table below.
| Apartment Type | ROI (%) |
|---|---|
| Studio | 5.63 |
| One-bedroom | 6.45 |
| Two-bedroom | 6.45 |
| Three-bedroom | 6.16 |
As the table demonstrates, the most profitable investment options in Dubai Hills Estate are one- and two-bedroom apartments with a return of 6.45%.
The table below shows the ROI for villas in Dubai Hills Estate.
| Villa Type | ROI (%) |
|---|---|
| Three-bedroom | 6.75 |
| Four-bedroom | 6.02 |
| Five-bedroom | 5.38 |
| Six-bedroom | 6.21 |
The highest rental yields are shown by three-bedroom villas with a return of 6.75%.
DAMAC Hills
DAMAC Hills is an eco-friendly self-contained community offering hotels, townhouses, villas, and apartments in off-plan development projects with high-end amenities. DAMAC Hills is home to Trump International Golf Club, as well as 372,000 m2 of parkland with various themed areas for relaxation and sports.
DAMAC Hills is considered a profitable investment location due to a unique golf course nearby and major infrastructure facilities, including a Carrefour supermarket, Jebel Ali School, cleaning services, a shuttle service to Mall of the Emirates, and a special Green Zone where you can choose and purchase plants for your home.
The advantage of DAMAC Hills is that local residences are located close to the center of Dubai but at the same time isolated from the noise and traffic of the big city.
You can see the ROI for apartments in DAMAC Hills in the table below.
| Apartment Type | ROI (%) |
|---|---|
| Studio | 6.1 |
| One-bedroom | 6.1 |
| Two-bedroom | 5.5 |
| Three-bedroom | 5.4 |
The most profitable option for investors in DAMAC Hills housing are studios and one-bedroom apartments with a return of 6.1%.
The table below shows the ROI for villas in DAMAC Hills.
| Villa Type | ROI (%) |
|---|---|
| Two-bedroom | 6.1 |
| Three-bedroom | 5.4 |
| Four-bedroom | 5.0 |
| Five-bedroom | 4.4 |
| Six-bedroom | 4.4 |
Two-bedroom villas generate their owners the highest rental yield of 6.1%.
Buying an apartment in Dubai for investment means acquiring a valuable asset with a high probability of receiving an annual income that is much higher than the average return on bank deposits. However, for investment properties to meet the needs and opportunities of potential investors, it is important to find a neighborhood with strong housing demand and a high ROI. All of the above neighborhoods offer high ROIs and are sought after by investors and tenants. However, picking the most profitable investment project still requires the assistance of experts who have thorough knowledge of the Dubai real estate market.
