Dubai vs. Global Cities: Why Dubai Outperforms in Real Estate ROI

In recent years, Dubai has Globally emerged as one of the most attractive real estate investment destinations. Due to Dubai’s high rental yields, capital appreciation, tax advantages, and investor-friendly regulations, Dubai’s real estate sector is surpassing mature markets like London, New York, Singapore, and Hong Kong. This comparative review discusses how Dubai delivers exceptional return on investment (ROI) across six key categories: rental yields, capital appreciation, taxes and transaction costs, foreign ownership regulations, market liquidity, and economic outlook.

Rental Yields are a primary ROI metric—and this is where Dubai outshines its global peers. As of late 2024, average gross rental yields in Dubai hover around 6.97% across all properties, with apartments reaching up to 7.4% and villas around 5.3%, according to Bayut and ValuStrat. In communities like Jumeirah Village Circle or Dubai Silicon Oasis, yields can exceed 8–9%. In comparison, London’s rental yields average 2–4% in central areas, while Singapore offers around 3.4%, New York 3–5%, and Hong Kong around 3.5%. These figures are often gross yields—once taxes are applied in other cities, net returns fall even further. For example, a 3% gross yield in London becomes 1.8–2% net after stamp duties, income taxes, and annual council tax. In contrast, Dubai has no rental income tax, so a 7% gross yield remains almost entirely net, making it far more attractive for income-seeking investors.

When it comes to capital appreciation, Dubai has experienced extraordinary growth post-2020. Driven by economic diversification, foreign investor influx, and limited high-end supply, Dubai’s real estate prices surged—especially in prime areas. According to Knight Frank, prime Dubai properties saw nearly 190% growth since 2020, with a 16.9% jump in 2024 alone. By contrast, London’s prime markets remained largely flat, registering around 2% growth in 2024 after years of stagnation due to Brexit and tax reforms. New York experienced a slow recovery, with projections at 3% for 2025. Singapore has shown stable growth of 3–5% annually but is now flatlining due to cooling measures. Hong Kong, once a hotspot, has seen prices decline up to 15–20% since 2019, only stabilizing marginally in 2024. While global cities struggle with tepid or negative appreciation, Dubai continues to show robust upward movement, offering investors both rental and equity-based ROI.

Another factor tipping the scale is tax efficiency. Dubai is virtually unmatched here—it has no capital gains tax, no annual property tax, no stamp duties on rental income, and no inheritance tax. The only notable fee is the one-time 4% Dubai Land Department (DLD) transfer fee at purchase. In contrast, the UK charges up to 15% stamp duty on purchases (including foreign buyer surcharges), levies annual council tax, and imposes capital gains taxes ranging from 18–28%. New York imposes property taxes (around 0.9%), federal and state income tax on rental income, and capital gains taxes upon sale. Singapore, despite its reputation for safety and transparency, has perhaps the highest barriers for foreign investors—levying up to 60% Additional Buyer’s Stamp Duty (ABSD) on foreigners. Hong Kong has traditionally been tax-friendly, but its previous 30% combined stamp duties for foreigners made it costly—now reduced to 15% in 2024. Despite these recent cuts, Dubai’s low-friction, tax-free regime allows more of an investor’s returns to remain intact.

In terms of foreign ownership, Dubai leads with an open-door policy. Since 2002, foreigners have been allowed to purchase freehold property in designated areas. The process is straightforward, and there are no currency controls, allowing easy repatriation of profits. Moreover, Dubai offers 10-year Golden Visas for property investors and even shorter visas for investments as low as AED 750,000. This is in stark contrast to Singapore, where foreigners can’t buy landed homes and face heavy stamp duties on condos. Hong Kong and New York remain open but offer no real residency benefits and come with legal and tax complexities. The UK also allows foreign ownership but recently imposed a beneficial owner registry and foreign buyer taxes, making some investors wary.

Market liquidity and demand trends further bolster Dubai’s ROI appeal. Dubai set a new record in 2024 with over 180,000 property transactions, a 36.5% year-on-year increase, and a transaction value exceeding AED 522 billion. Strong rental demand, fueled by a growing population (expected to exceed 6 million by 2040) and business-friendly immigration policies, keeps vacancy rates low. Rental contracts surged 13% year-on-year, and rents in prime areas jumped by nearly 17% by Q4 2024. Even with tens of thousands of new units being delivered, demand has consistently absorbed supply. Meanwhile, London’s transaction volumes fell in 2023 due to economic and rate uncertainties. New York’s inventory is recovering, but rent regulations and property taxes continue to impact net yields. Singapore’s volumes have dropped after ABSD increases discouraged foreign buyers. Hong Kong’s sales volume rose slightly in 2024 but remained 30–40% below pre-pandemic peaks.

Dubai’s economic stability and future outlook also support sustained ROI. Its GDP grew approximately 3.3% in 2023, with strong diversification into sectors like tourism, fintech, and logistics. The UAE’s zero income tax policy, dollar-pegged currency (AED), and political stability make it an ideal environment for capital preservation and growth. Major initiatives like Dubai 2040 Urban Master Plan and hosting global events like COP28 continue to position the city as a global hub. London and New York offer mature, slow-growth economies with high taxation and complex regulations. Singapore remains economically stable, but its real estate market is increasingly protectionist. Hong Kong’s political environment and close integration with Mainland China introduce long-term investor uncertainty.

When combining all factors—rental yield, appreciation, taxes, ease of entry, and growth outlook—Dubai offers the most compelling ROI. A $1 million property in Dubai yielding 7% annually will generate $350,000 in rental income over 5 years, tax-free. If the property appreciates 30% over that period, the investor nets $650,000. By comparison, a similarly priced property in London or New York might yield just 2–3% net after taxes and appreciate less than 10% in five years, leading to a total return of perhaps $150,000–$200,000, further reduced by transaction costs and capital gains tax.

In short, while cities like London, New York, Singapore, and Hong Kong remain globally significant, their real estate markets are becoming increasingly difficult for foreign investors to enter profitably. High property prices, heavy taxation, strict regulations, and modest yields limit their appeal. In contrast, Dubai offers an ideal combination of affordability, high rental income, fast-growing property values, tax neutrality, and liquidity, making it arguably the most ROI-efficient property market in the world right now. For serious investors focused on maximizing returns without excessive red tape, Dubai real estate continues to outperform—and all signs suggest it will remain a global leader in real estate ROI for the foreseeable future.

Sources

• Knight Frank – Prime Global Cities Index Q3 2024 (Dubai prime prices +190% since 2020); 2025 Forecast (Dubai +5% vs London +2%, NY +3%, HK 0%, SG 0%).
• Dubai Land Department / Property Finder – 2024 Dubai transactions (180,987 deals, +36.5% YoY).
• Global Property Guide – Dubai rental yields ~7% (2024) vs London ~3-5%, New York ~3-5%, Singapore ~3.4%, Hong Kong ~3.5%.
• Strada UAE (Realty consultancy) – Comparative analysis highlighting Dubai yields 5–9% vs London 2–4%, NY 3–5%, SG 3–4%; tax-free advantage; foreign ownership ease.
• Emaar Properties – Blog emphasizing Dubai’s 7% yields vs London ~2.4%, and Dubai’s double-digit growth trend properties.emaar.comproperties.emaar.com.
• Reuters / Government sources – Singapore cooling measures (foreign ABSD 60%); Hong Kong stamp duty cuts (30%→15% for foreigners).
• Global consultancy & media reports – Various data on price trends (Singapore +3.9% 2024, UK -1.8% 2023, HK price drops), rental trends (Dubai rents +17%, HK yields up to 3.5%), and macroeconomic context.