Dubai has matured into a global real estate hub that—on a risk-adjusted basis—often outperforms stalwart markets like London, Singapore, and New York. The drivers are clear: stronger rental yields, lighter taxation and transaction frictions, landlord-friendly rules, deep liquidity, and policy tailwinds (visa reforms, infrastructure, and business openness). Below is a concise, data-driven comparison for investors.
1) Income performance: higher rental yields
Gross yields in Dubai typically sit in the 6%–7% range, with many mid-market apartment districts exceeding 7%. That’s materially above most developed city averages. In 2025, Engel & Völkers estimated Dubai’s average rental yield at 6–7%, with apartments outperforming villas and districts like JVC and Sports City frequently above 7%. Engel & Völkers
By contrast, prime central London gross yields hover around ~3.4%, even after recent rental growth, reflecting higher asset values relative to rents. Broader central London averages vary by borough but commonly fall in the 3%–6% range. Savills
Singapore’s average residential yield is tighter at ~3.36% (Q3 2025), consistent with its premium pricing and policy-constrained rental market. Manhattan condos typically price to ~2%–3% net cap rates. Global Property Guide
Bottom line: Dubai’s income return is structurally higher, giving investors more carry and a wider cushion against rate or price volatility.
2) Tax and frictional costs: Dubai is lighter
Dubai levies no annual property tax on residential real estate, a powerful tailwind for buy-and-hold income investors. There is a 4% transfer fee at purchase, but ongoing ownership is not eroded by council or property taxes. Engel & Völkers
Comparatives are more punitive:
- London (UK): investors face Stamp Duty Land Tax with surcharges on additional properties; higher bands apply from April 2025, materially increasing buy-in costs. Ongoing council tax also applies. GOV.UK
- Singapore: foreigners pay 65% Additional Buyer’s Stamp Duty (ABSD) on residential purchases (effective from Apr 27, 2023; still in force in 2025), drastically raising entry costs.
- New York City: buyers contend with transfer taxes and a “mansion tax” of 1%–3.9% above price thresholds, plus recurring property taxes; typical closing costs are ~5%–6%. Prevu
Bottom line: lower recurring taxes and moderate frictional costs improve Dubai’s net yields and IRR versus peers.
3) Policy tailwinds and investor access
Dubai’s pro-investment stance is anchored by open foreign ownership in freehold zones, straightforward conveyancing, and long-term residency pathways (e.g., 10-year Golden Visa via AED 2M real-estate investment), which expand the end-buyer pool and promote capital formation. While London and New York are also open, Singapore’s ABSD sharply curtails foreign demand—especially at higher price points. Default
4) Landlord-friendliness and regulatory clarity
Dubai’s tenancy regime is generally more landlord-friendly than those in London or New York, where ongoing regulatory change and tenant-protection measures can compress operating flexibility and value. UK landlords in particular face a patchwork of tax increases, energy-efficiency rules, and a renters’ reform agenda that continues to reshape the economics of buy-to-let, pushing many owners to exit or pivot to shorter lets. Financial Times
5) Demand, demographics, and liquidity
Population growth, business formation, and tourism underpin strong end-user and rental demand in Dubai. Average asking rents rose again in Q3 2025 (apartments +5.6% YoY), reflecting continued absorption. Transaction volumes and the developer pipeline keep liquidity deep, allowing investors to enter/exit with relatively tight spreads compared with other emerging hubs. The Times of India
By contrast, New York and London are highly liquid but often price at a premium to replacement cost, limiting yields. Singapore maintains exceptional macro stability but deliberately moderates speculative inflows via stamp duties—good for stability, not always for investor returns. Default
6) Risk-adjusted view (and what to watch)
No market is risk-free. After a multi-year up-cycle, Fitch flagged potential for a double-digit price correction (up to ~15%) in Dubai into late-2025/2026 as a large delivery pipeline comes to market. For long-term investors, the buffers are: higher starting yields, modest ongoing taxes, and diversified demand (tourism, corporate relocations, high-net-worth migration). But underwriting should incorporate conservative rent growth, vacancy, and service-charge assumptions, plus sensitivity to interest-rate paths. reuters.com
7) Putting it together: comparative investor math
- Income: Dubai 6–7% gross vs. London ~3–4% (prime), Singapore ~3.3%, Manhattan ~2–3% net caps. Even after conservatively netting Dubai yields for service charges and occasional vacancy, net income typically remains ahead. Castle Avenue
- Friction & carry: With no annual property tax, Dubai’s carry cost is materially lower than New York or London, compounding investor outperformance over multi-year holds. Engel & Völkers
- Entry barriers: ABSD in Singapore (up to 65% for foreigners) and UK SDLT surcharges compress forward returns; Dubai’s entry costs are simpler and often lower in aggregate. IRAS
- Policy visibility: Residency programs and business-friendly rules expand the buyer and tenant base in Dubai; regulatory tightening in London and parts of the U.S. can pressure landlord yields. Financial Times
Practical takeaways for investors
- Target mid-market apartments in supply-balanced districts where yields still screen >6%.
- Stress test with a 10–15% price shock and flat rents for 12–18 months; ensure DSCR and liquidity buffers pass.
- Compare total cost of ownership, not just headline yields: include taxes, service charges, stamp duties, and closing costs.
- Plan your exit—Dubai’s liquidity is strong, but unit mix, developer quality, and micro-location (views, layouts, parking) drive resale velocity.
Conclusion: If you optimise for cash yield, tax efficiency, and regulatory clarity, Dubai currently presents a superior proposition to London, Singapore, and New York. Investors who underwrite prudently—acknowledging supply cycles—can harness Dubai’s structural advantages for durable, compounding returns.
