Yields · 2 Sept 2026 · 6 min read
Dubai rental yield vs Tel Aviv: the same money, different numbers
Dubai gross yields ran 5.53% against 3.15% in Israel. Here is where that gap comes from — and the costs that sit under both numbers.
Most buyers from Israel start with the same sentence: the numbers abroad look better, but I do not know what is missing from them. That is the right instinct. A yield is a headline, not a result. This note sets the two markets side by side and then takes the headline apart.
The gross yield gap
Global Property Guide put gross residential yields in the UAE at 5.53% in Q2 2026, with Abu Dhabi at 5.76%. The same source put Israel at 3.15%, and a two-bedroom apartment in Tel Aviv at 2.57%.
The second half of the gap is the entry price. The average apartment in Israel cost ₪2,332,800 in Q1 2026 according to the Central Bureau of Statistics, and ₪4,594,500 in Tel Aviv. Roughly the same capital buys a materially larger, newer unit in Dubai or Abu Dhabi than it buys in central Israel.
What the headline does not include
- Dubai transfer costs: the Dubai Land Department fee is 4% of the purchase price, with roughly 2-3% in registration, trustee and agency costs on top.
- Management: long-term letting in Dubai typically costs 5-8% of rent; serviced or short-let management runs 15-25%.
- Service charges: an annual per-square-foot building charge that has no exact equivalent in the Israeli market. Ask for the figure per project, in writing, before you sign.
- Israeli management for comparison: about 10% of rent plus a finder fee.
- Vacancy: no honest model assumes twelve rented months in year one.
Run those through a 5.53% gross and the number lands lower. It still lands above 3.15% gross before the same subtractions are made on the Israeli side — but the point is that you should compare net to net, with your own numbers, not headline to headline.
The Israeli side of the ledger
Two Israeli figures matter when you model a second property at home. Purchase tax on an additional apartment starts at 8% from the first shekel and reaches 10% above ₪6,055,070, with the brackets frozen to 2028. The Bank of Israel caps loan-to-value on a second home at 50%, and the policy rate stood at 3.50% in July 2026 with the average unlinked mortgage at 4.79% in March 2026.
In other words, the Israeli alternative is not a 3.15% yield alone. It is a 3.15% yield after an 8% entry tax and a financing cost near 5%.
Currency
The dirham has been pegged to the dollar at 3.6725 since 1997, so a UAE purchase is a dollar exposure in practice. With the shekel near a thirty-year high against the dollar, the same shekel converts to more dirham than it did for most of the last decade. That cuts both ways on exit, and it belongs in your model as a risk line, not as a selling point.
How to use this
Take one project, not a market. Ask for the service charge, the payment schedule, the handover date and the developer's registration. Put the transfer costs, management and one vacant month into the sheet. Then compare that net figure with the net figure on an Israeli second apartment. If the gap survives the subtraction, it is real.
Figures are gross market averages from the dates shown, not a projection for any individual unit. Nothing here is tax or investment advice.
Questions the article did not answer?
Tell a Manzely agent what you are weighing up. You get one person, in your language, from the first question to the key.
