Property market in Dubai: Where to invest for promising returns

From a property investment perspective, it’s looking good for buyers. There’s development happening across the city, mortgage rates are good, and sellers are being reasonable. Although none of us can predict the future (especially since Covid-19 struck our city and the rest of the world), we do know this – there is much more confidence in the market.

From our side of the business – the Holiday Home rental market – we are seeing a lot of investment across Dubai as short-term and holiday lets continue to be in demand. We are also seeing new trends and opportunities for the highest short-term let returns.

Where to buy property in Dubai
When you’re looking for a property to buy as a primary residence, location is everything. That used to also be the case for short-term lets in Dubai. But as the city continues to expand, there are more and more excellent areas that are popular with travellers and locals looking for a short-term residence.

Main tourist areas continue to be popular. Places like Dubai Marina, Downtown Dubai, and Palm Jumeirah. If you can secure a property in any of these areas—especially with walking distance to the beach and the top destinations—you’ll see occupancy above 85 per cent annually. (And likely above 95 per cent during Expo).

We’ve seen Covid-19 change some behaviours around the short-term letting market. People are still attracted to the high tourist areas, but they’re also choosing places further away from these destinations. Many are working remotely and have chosen to stay in Dubai for a time. They’re looking for a comfortable property that isn’t too pricey, with a functional office area and reliable Wi-Fi.

This change is carrying over into the holiday market. Many guests want something with great facilities, and a mall and restaurants nearby. If they want a day at the beach, they’ll buy a day beach/pool pass at a Dubai hotel and happily come back to their ‘home away from home’ at the end of the day. JVC is one area that’s very promising for this type of guest.

Other areas that we see consistent occupancy for short-term lets and holiday homes include Business Bay, Sports City, Barsha South, and Dubai South all around the Expo site. Properties that Frank Porter manages in Jebel Ali and Dubai South are beginning to get traction, and this will accelerate quickly in the next month or so. We expect all these areas to continue to perform well and see them as excellent locations for purchasing investment property to short-let.

The increased choices for location, types of property, and amenities are a dream for short-term lets. Now, more than ever, there’s demand for all these properties. This means the opportunities are far more extensive than just a few years ago.

Should investors stick to premium properties?
Not at all! There is still a demand for premium properties—and we have an extensive network of guests looking for premium properties for holidays and short-term lets. But there’s a growing market for other kinds of properties.

These properties include homes and apartments that are perfect for a family holiday, an apartment that will meet the needs of a remote worker who wants a change of scenery for a month or two, a comfortable place for someone to stay who’s coming to Dubai for a medical procedure, and all the tourists, investors, businesspeople, and contractors who will be in Dubai for Expo.

With the new airport and all the transportation projects going on in Dubai, areas that weren’t given much thought in the past are becoming very desirable.

Expo is just one event that’s influencing residential property purchases. Covid, a variety of tourists, and all the developments across Dubai are also having an impact. And, when you’re looking at a great return on your investment, now is the best time to look at properties suitable for short-term lets.

Anna Skigin is the CEO of Frank Porter