Launched in 2020, the Retire in Dubai visa programme allows eligible applicants to apply for a long-term UAE retirement visa. To qualify for the 5-year renewable Dubai retirement visa, one of the options for a retiree is to invest in a property worth Dh2 million (about Dh550,000) in Dubai. The authorities allow investors to combine two or more of their properties of lesser value to cross the Dh2-million threshold. All such properties must, however, be bought outright (without a mortgage or loan).

Most Dubai neighbourhoods offer value for money units and rental yields are generally better than most other international destinations. Until a decade or so ago, a supply-demand mismatch meant Dubai’s rental yields were among the highest in the world. Landlords earning a 10-per-cent-plus annual return on their properties wasn’t unheard of, and it was one of the factors that led to dynamic market activity. But while higher yields were great for landlords, it became increasingly difficult for even mid-income earners to keep up with the rapidly rising rentals.

Thanks to government intervention by way of temporary rent-freezes and subsequent limits on annual rent hikes, Dubai’s rental yields have recently moderated to between 5 and 7 per cent. Nevertheless, Dubai remains among the world’s most lucrative property destinations. Further, there are pockets of opportunity for savvy investors to beat the market average.

Dubai My Second Home has done the leg-work for you to put together a list of the top five Dubai neighbourhoods that offer the best rental yields (data compiled in July 2021). It may not come as a surprise to experienced investors, but relatively smaller apartments in affordable neighbourhoods are clear winners when it comes to rental yields.

1. International City. Located on the Dubai-Hatta road, suburban International City is anchored by two Dragon Mart shopping and dining complexes. The neighbourhood comprises mixed-use, low-rise, country-themed residential clusters.

The ground floors of the buildings are reserved for shops and other commercial units including groceries, family-friendly restaurants, salons, etc. Studio apartments in the Morocco cluster of Dubai’s International City are currently available for sale starting at Dh190,000 while they can be rented out for Dh16,000. This will give the investor a gross yield of 8.42 per cent, which will be considered an amazing rental yield anywhere in the world. A one-bedroom apartment in the same neighbourhood will set you back by Dh275,000 while it can be rented out for Dh22,000. That’s a gross yield of 8 per cent – still quite substantial.

Relatively smaller apartments in affordable neighbourhoods are clear winners when it comes to rental yields

2. Remraam. Located at the intersection of Emirates Road and Sheikh Mohammed Bin Zayed Ro0ad, Remraam offers affordable community living in the fast-developing Dubailand area. It is about 16km away from the Mall of the Emirates and about the same distance away from the Expo 2020 site, making the location accessible yet peaceful. The Remraam neighbourhood boasts of 13 play areas including tennis and basketball courts.

Studio apartments in Remraam’s Al Thamam development can be rented for Dh19,000 while the asking sales price is in the vicinity of Dh255,000. This works out to a gross yield of 7.45 per cent, which isn’t to be sneezed at considering that Dubai is now a tenant-friendlier market. A one-bedroom apartment in the same neighbourhood is available for an asking price of Dh370,000 while it will fetch an average rental of Dh27,000 – a gross yield of 7.3 per cent.

3. Dubai Sports City. Located on Mohammed Bin Zayed Road, Dubai Sports City offers a mix of residential, retail, leisure and recreational facilities. The neighbourhood is anchored around five major sports venues and features a number of sports academies. The residential part of the community consists of mid-rise apartment buildings (Canal Residence), townhouses (Victory Heights) and villas (Gallery Villas).

Rentals at studio apartments in DSC start at Dh18,000 per year while they can be bought for a price starting at Dh250,000, giving investors a gross yield of 7.2 per cent. Usually, bigger apartments offer a comparatively lower yield but in the case of DSC, the gross yield offered by one-bedroom apartments beats those from studio units. Rentals for a one-bed start at 28,000 while sale prices start at Dh350,000, offering a gross yield of 8 per cent.

4. Al Khail Heights. Located in Al Quoz with access through Al Khail Road, the Al Khail Heights community is a small residential development comprising 58 townhouses and 26 apartment buildings. The affordable neighbourhood may not have a mall or school within the small complex, but it has all amenities within reach. Within a five to 10-minute drive are three malls (Dubai Mall, Oasis Mall and Times Square), two major parks (Safa Park, Jumeirah Beach Park and Zabeel Park) and schools (Jumeirah English Speaking School, Dubai International School, JSS and Gems World Academy).

Investors in apartments in the small and cost Al Khail Heights can expect rental yields of 7 per cent-plus. Studio apartments are available for sale in the neighbourhood at a starting price of Dh380,000 while they can be rented for at least Dh280,000, giving potential investors a gross yield of about 7.4 per cent. A one-bed unit in the community can be rented out for a minimum of Dh38,000 and is available for sale with prices starting at Dh530,000. That’s a gross yield of 7.17 per cent.

5. Discovery Gardens. Nakheel-developed Discovery Gardens is located in Dubai’s Jebel Ali district. The neighbourhood comprises nearly 300 buildings that house more than 26,000 apartments, 200 retail shops, and three medical centres. The neighbourhood is sub-divided into six residential clusters: Mediterranean, Mogul, Zen Cluster, Contemporary, Mesoamerican, Discovery Gardens Pavillion and Cactus, each featuring distinct styles. Anchored by the Ibn Batuta Mall, the community is very well-connected, accessible from both Sheikh Zayed Road and Emirates Road. It is served by the Discovery Gardens station on the Dubai Metro, one of the stations on the Route 2020 extension to the Red Line for Expo 2020.

Investors in apartments in Dubai’s Discovery Gardens community can expect rental yields of between 6 and 7 per cent. A studio in the neighbourhood can be bought for prices starting at Dh285,000 while it can be rented out for at least Dh18,000. That’s a gross rental yield of 6.3 per cent. One-bedroom apartments offer a comparatively better yield, with sales prices starting at Dh400,000 and rentals at Dh28,000. That works out to a gross yield of 7 per cent.

That sums up our list of the five Dubai neighbourhoods that offer the top gross yields. As mentioned earlier, this isn’t investment advice. This article provides indicative yields at the time of publishing (July 2021) and the calculations do not include finer details like annual maintenance fees and other periodic charges. Potential investors must conduct their own due diligence before making any investment decision.