I ran 29 UAE areas through a mortgage stress test at 5.25%. Not one of them covers its own mortgage on a 25% deposit.
I kept seeing "Dubai yields 7-8%, best rental market in the world" and wanted to know what that actually leaves you after the bank is paid. So I ran the same buy across 29 UAE areas and let only the area change.
The buy, identical everywhere: a 900 sqft apartment, bought at that area's own benchmark price per sqft, let at that area's own benchmark yield, 25% down, 5.25% over 25 years, that area's own vacancy assumption, service charges and operating costs deducted before the mortgage.
Result: zero out of 29 reach a DSCR of 1.00. Every single one is cash-flow negative every month at 25% down.
Best six (deposit you'd actually need to break even):
JVC 41.5% AED 410,850
Silicon Oasis 46.5% AED 376,650
Arjan 47.5% AED 448,875
Al Furjan 48.0% AED 496,800
Discovery Gardens 48.0% AED 324,000
Sports City 48.5% AED 414,675
Worst five:
Al Ain 87.5%
Mussafah 66.0%
Khalifa City 65.0%
Corniche 65.0%
Saadiyat Island 63.0%
Median across all 29: 53.5%.
The part I didn't expect: it's an almost perfect inversion of prestige. The cheaper, less glamorous areas need the smallest deposit; Saadiyat and the Corniche need roughly two thirds down before the rent covers the loan.
What this doesn't say: that these are bad buys. Capital growth is real and isn't in this at all, and a cash buyer has no DSCR problem. What it says is narrower — at today's rates, a standard 25% mortgage in the UAE is not an income play. It's a growth play that costs you money monthly while you wait.
Assumptions are all above deliberately, so tell me where it's wrong. The two I'd push back on myself: service charge per sqft varies a lot by building, and the benchmark rents are area averages, not what a good unit actually achieves.
Genuinely curious about the one thing I can't model: for those of you who've bought here on a mortgage — what deposit did your bank actually want, and did the rent cover it?