A one-bedroom apartment in Dubai Marina generates 7-8% gross rental yield. The same investment in Central London returns 3-4%. In Manhattan, you're looking at 3-4%. Singapore sits around 3-4%, and Sydney trails at 2-3%. These aren't projections. They're current market numbers based on average asking rents against average purchase prices.
The gap is wide. It's been wide for years. And it's worth understanding why.
Yield by Area in Dubai
Dubai isn't one market. It's a collection of micro-markets with dramatically different return profiles. Dubai Marina and JBR consistently deliver gross yields between 7% and 8% on apartments. Downtown Dubai sits lower at 5-6%, reflecting higher purchase prices per square foot without a proportional rent premium. JVC (Jumeirah Village Circle) pushes above 8% for studios and one-beds, driven by lower entry prices and strong tenant demand from mid-income professionals.
Palm Jumeirah is a different story. Yields on villas hover around 4-5%, while apartments can reach 6-7%. The entry cost is significantly higher, so even at strong rents, the percentage return compresses. Business Bay falls in the 6-7% range, with some newer towers tracking closer to 7.5% as the area matures.
How London, NYC, and Singapore Compare
London's prime central postcodes, such as Kensington, Chelsea, and Mayfair, deliver gross yields of 2.5-3.5%. Outer zones (Zone 3-4) push closer to 4-5%, but you're trading location prestige for yield. Factoring in income tax at up to 45%, Section 24 mortgage interest restrictions, and management fees, net returns in London frequently drop below 2%.
Manhattan's gross yields average 3-4% across most neighbourhoods. A $1.5M condo in Midtown might rent for $4,500/month, which is 3.6% gross before property tax (around 1% annually), management fees, and federal plus state income tax. Net yield rarely exceeds 2-2.5%.
Singapore's rental yields have held around 3-4% since cooling measures were introduced in 2013. The Additional Buyer's Stamp Duty (ABSD) of 60% for foreign buyers makes entry prohibitively expensive. Even at decent rents, the upfront tax destroys effective yield calculations for international investors.
Sydney averages 2-3% gross. Combined with strict foreign buyer regulations and a 7% surcharge stamp duty in New South Wales, Australia is one of the least yield-friendly markets for overseas capital.
Why Dubai Outperforms
Three structural factors explain the yield gap. First, zero personal income tax. Rental income in Dubai isn't taxed. A 7% gross yield is much closer to a 7% net yield than anywhere else on this list. London landlords lose 20-45% of rental income to HMRC. NYC landlords face combined federal and state rates up to 37%.
Second, population growth. Dubai's population grew from 3.1 million in 2020 to approximately 3.7 million by end of 2024. That's 19% growth in four years. Every new resident needs housing. The emirate issued over 120,000 new residency visas in 2023 alone. This demand-side pressure keeps rents firm.
Third, tourism and short-term rental markets. Dubai welcomed 17.15 million overnight visitors in 2023. Properties in Marina, Downtown, and Palm Jumeirah have strong Airbnb potential, with short-term returns often 30-40% higher than long-term tenancies. DTCM licensing makes it legal and straightforward.
The Costs That Reduce Net Yield
Dubai isn't tax-free in every sense. The DLD (Dubai Land Department) charges a 4% transfer fee on purchase, split by convention as 2% buyer and 2% seller, though in practice, buyers usually absorb the full 4%. On a AED 2M property, that's AED 80,000 upfront.
Annual service charges vary by building and developer. Marina towers typically charge AED 14-18 per square foot annually. On a 900 sqft apartment, that's AED 12,600-16,200 per year. Downtown towers run AED 16-22 per square foot. Older buildings in JVC are cheaper at AED 8-12 per square foot.
Factor in 5% agency fees on lease renewal, 2-4 weeks of vacancy per year, and minor maintenance, and a 7.5% gross yield typically becomes a 5.5-6.5% net yield. That's still double or triple what London and NYC deliver after tax.
What Investors Should Expect
A realistic expectation for a Dubai buy-to-let investor: 5.5-7% net yield depending on area, property type, and management approach. Capital appreciation is harder to predict. Dubai's property market is cyclical. It surged 20%+ in 2023, cooled in certain segments in 2024, and continues to attract global capital. Buying for yield alone is a strong case. Buying for yield plus growth requires market timing.
The data is clear on one point: for pure rental income, Dubai delivers more per dollar invested than any major global city. The zero-tax structure isn't a marketing gimmick. It's a mathematical advantage that compounds year over year.