Ajman – The Small Emirate Offering Big Yields

Overseas property investors considering the United Arab Emirates should look at Ajman if they are searching for high rental yields on their investment.

One of the smallest emirates in the United Arab Emirates (UAE), covering just 260 square kilometres, Ajman is located north of Sharjah on the coast of the Persian Gulf.

The city of Ajman is home to around 95 per cent of the emirate’s population. Commuters who live there can reach Dubai in under an hour, depending on traffic, making it a good base for Dubai workers struggling to afford rental prices in Dubai.

According to research across various communities in the country, the emirate offers one of the highest rental yields in the world, pegged at 9.6 per cent per annum between April and October 2017. Yields are up 0.3 per cent over the same period six months earlier.

This means that a studio bought in Ajman for just a little over Dh300,000 may provide overseas property investors with an annual gross income of approximately Dh29,000.

Obviously, landlord insurance, property management fees, etc., would need to be taken into account to arrive at the net yield, however a gross yield of near 10 per cent in Ajman far outstrips most other metropolitan areas around the world.

Average rental yields in Geneva for example sit at 3.3 per cent and New York at 2.9 per cent. Tokyo and Hong Kong offer even smaller incomes, at 2.7 per cent and 2.6 per cent respectively, according to figures compiled by Global Property Guide.

Property prices in Ajman are the most affordable in the UAE, with asking prices averaging just Dh30 per square foot for apartments, according to Propertyfinder, which conducted the research.

CCO of Propertyfinder Group, Lukman Hajje, said: ‘Rental yield is one of the most important consideration for a would-be property investor. It gives an indication of the expected income generated from a property investment.’

The company, however, pointed out that besides Ajman, locations across the UAE have held up well through the real estate slowdown.

Mr Hajje continued: ‘Despite continued decline in real estate prices, since market peak in mid-2014, rental yields throughout the UAE remain strong, and in some cases, attract yields that exceed averages around the world.’

It seems that to maximise rental yields for their investment in the UAE, overseas property investors may want to look beyond Dubai, to the smaller neighbouring emirate of Ajman.