Properties in Downtown Dubai have recorded "impressive price growth" (over 30 per cent in recent periods) but offer lower yields, according to Property Finder.
Buying a property in Al Hamra Village in Ras Al Khaimah offers the highest rental yield of 8 per cent in the UAE, according to a study by listings portal Property Finder.
The community offers resort-style amenities, is fully freehold and free of major purchase barriers, making it one of the most accessible value-for-money options in the UAE, Property Finder said in a ranking of the best areas for foreigners to buy their first homes based on factors such as rental returns, affordability, commute times, and freehold access.
Emirates City in Ajman ranks second on the list, owing to its affordability. With properties starting at Dh449,000 ($122,260), it has the lowest entry point on the list. While the 65-minute commute to Dubai may be a trade-off, the high yield and low cost of living continue to attract budget-conscious buyers, the report said.
Some additional checks, such as escrow compliance and limited mortgage access, are worth noting during the buying process, Property Finder warned.
Al Reem Island in Abu Dhabi completes the top tier of high-yield, well-connected areas that tick all the boxes for smart investment. The neighbourhood offers a combination of short commute (29 minutes), full freehold status, and strong price appreciation.
"With new developments and infrastructure upgrades under way, Al Reem is a compelling option for buyers looking for both convenience and capital growth," the report said.
The UAE's property market, which bounced back strongly from the Covid-driven slowdown, has maintained a sharp growth trajectory since.
Government measures, such as residency permits for retired and remote workers and expansion of the 10-year golden visa programme, have boosted foreign investment flows into the country's property market over the past few years.
The robust momentum in the UAE's economy, the Arab world's second largest, driven by the government's diversification efforts have also supported real estate market activity.
In July, a new scheme was also launched to help Emiratis and UAE residents, who do not own any freehold residential property in the emirate, get on the property ladder.
Under the initiative, first-time buyers will have priority access to new homes from participating developers as well as existing inventory, discounts or limited-time offers on the sales price of off-plan units, flexible payment plans and "improved" mortgage options with better interest rates, faster approval times and reduced fees.
The Dubai Land Department expects 5,000 more investors to enter the market this year following the initiative.
Jumeirah Lakes Towers (JLT), Business Bay and Jumeirah Village Circle are all mid-market Dubai communities that offer "safe, steady options" for first-time buyers, especially those who want a central location without the premium price tag or extreme yield-chasing, according to the Property Finder study.
These communities offer rental returns ranging from 7.3 per cent to 7.9 per cent, full freehold ownership and benefit from strong infrastructure, diverse housing stock, and proximity to major business hubs, the report outlined.
However, buyers should be prepared for extra fees or compliance steps depending on the community, such as Dubai Multi Commodities Centre charges in JLT or off-plan escrow rules in Business Bay, the study warned.
Meanwhile, properties in Downtown Dubai have recorded "impressive price growth" (over 30 per cent in recent periods) but offers lower yields, "making it more appealing to long-term investors than income-focused buyers", according to Property Finder.
In terms of Saadiyat Island in Abu Dhabi, while its pricing is on the premium side, the area offers a "solid" rental yield of 6.8 per cent and moderate price appreciation of 7.7 per cent, "making it suitable for buyers looking for both lifestyle and return potential". However, buyers should note that title deeds typically apply to units only, not land, the report highlighted.
Other communities in Dubai worth considering by first-time home buyers include Arabian Ranches, "ideal for families looking to settle long-term", The Greens, "which appeals to buyers who value community atmosphere and mature infrastructure", and Al Barsha, which provides one of Dubai's most affordable urban entry points. However, only Al Barsha South is open to freehold buyers, the report added.
Dubai Marina and Jumeirah Beach Residence remain popular among residents and tourists, but from an investment perspective both are weighed down by modest yields and high service charges, according to Property Finder research.
"Palm Jumeirah commands prestige and global recognition, but from a buyer's perspective, its ultra-luxury positioning puts it out of reach. It's also one of the few areas on the list to show a decline in prices over the past year [-16.6 per cent] with relatively modest rental yields [5.3 per cent]. But while the lifestyle offering is unmatched, it's better suited to end users than those focused on capital growth or income," the report said.
"In contrast, Al Khan in Sharjah is an affordable opportunity with caveats, especially for buyers searching for lower entry prices than Dubai. It offers full freehold status and low living costs. However, rental yields are on the lower end [4.5 per cent], and the area faces air quality issues and regulatory complexity, so due diligence is essential."