The rental returns on Dubai residential real estate are more than three times those obtained in many global hub city property markets. Therefore as Dubai rental yields gradually converge with the global averages house prices are going to move very much higher.
Consider a humble one-bedroom apartment in The Greens. At the moment it would sell for AED800,000 and rent for AED60,000 per year, that is a gross rental yield of 7.5 per cent. If the rent remains static and the price is adjusted to a more normal global rental return then this apartment needs to be valued at AED2.4 million.
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