Price Performance
Looking at the price index for a sample of communities, the first obvious
observation is the overperformance of the Palm Jumeirah. More broadly, villas
have shown slightly greater price performance relative to apartments, but both
are dwarfed by the performance of domestic stocks over the last 12 years.
Surprisingly, both the ADX and the DFM indexes have outperformed the citywide
averages for both apartments and villas.
Yield Analysis
Within real estate, mid market has generally performed better than luxury in
terms of rental yield. Overall, however, stocks generally show greater yields
than real estate, and also more consistently return yields above the risk-free
rate.
Valuation Comparison
The valuations paint a similar picture, especially with respect to luxury
communities, which have far higher valuations than their mid market
counterparts, let alone stocks. For the most part, stocks are more attractively
priced (lower price to book ratio) when compared to their real estate
counterparts, which may endear them to investors as a superior
value-for-money prospect (with some exceptions).