Dubai real estate: Yield fallacy
Source: REIDIN , Author: Posted by BI-ME staff
Posted: Wed September 27, 2017 12:34 pm

UAE. A look into the international real estate markets reveals that over the years there has been yield compression. In the United States from the 1960's yields have declined by 29%, whereas in the Hong Kong from 1999 yields have compressed by 34%.

This secular decline (over a longer period of time for the US) reflect the structural decline in long term interest rates.

Similar to the international markets we witness that there has been a yield compression in Dubai from 9% to 7% in the apartment space. The yield compression has transpired as function of price growth outpacing rents. In the 18 months prices have remained flat lined but rents have decelerated.
 
Across major cities throughout the world, there has been a downward trending yield trajectory. Of all the major cities analyzed, Dubai remains far and above the highest yielding city, suggesting that there is ample room for further yield compression (partly a function of investors accepting lower risk premia) in the years ahead.
 
This suggests a different outcome of discourse, from the consensus based cacophony of analyst concerns that have been expressed.
 
To read the full report click here: http://bit.ly/2flJdJn   

Click here to read the original article on the REIDIN website

Photo Caption: For illustrative purposes only (File photo)

About REIDIN
REIDIN is the leading real estate information company focusing on emerging markets. REIDIN offers intelligent and user-friendly online information solutions helping professionals access relevant data and information in a timely and cost effective basis.

For more information, pleased visit www.reidin.com

About Unitas
Unitas believes in in-depth planning and discipline as a mechanism to identify and exploit market discrepancy and capitalize on diversified revenue streams. The purpose of Unitas is to manage, direct, and create wealth for our clients.

For more information, please visit www.unitasconsultancy.com

 

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