ROI analysis of apartment in Karma: DLD data and real deals

1. Definition of the area and data structure

Actual location: Karma complex is located in Wadi Al Safa 2, within the Liwan1 master project (DLD data). The analysis focuses on two-bedroom apartments (2BR, 2 b/r).

Data volume: There have been 77 registered sale transactions for 2BR units in Karma, which is sufficient for a full building-level analysis. There is no DLD data on rental contracts for the building itself or for the Liwan1 master project — the rental analysis is therefore provided only at the Wadi Al Safa 2 district level.

2. Sales dynamics: Karma and the district

Sales in Karma (2BR): Over the past year, activity has been high (more than 70 transactions for 2BR units), with the majority occurring over the last four quarters. The average sale price for 2BR transactions in Karma over the last 12 months was 10,782 AED per m².

Quarterly price dynamics in Karma (2BR):
– 2024 Q4: 10,860 AED/m² (32 transactions)
– 2025 Q1: 10,887 AED/m² (29 transactions)
– 2025 Q2–Q4: 10,500–10,900 AED/m² (12–3 transactions per quarter)

Price dynamics in Wadi Al Safa 2:
– 2020: on average 4,800–8,200 AED/m², with a sharp price drop in mid‑2020.
– 2021–2022: stabilization in the 4,500–6,000 AED/m² range.
– 2023: growth to 7,300 AED/m² by year-end.
– 2024: sharp acceleration — by Q1: 10,237 AED/m², Q2: 9,239 AED/m², then stabilization and new records in 2025 (up to 14,500 AED/m² in Q4).

The average price in the district over the last 12 months is 13,356 AED/m². In practice, Karma (2BR) is selling at a 19% discount to the district’s average market level over the past year.

3. Rentals: district-level analysis

According to DLD, there are no rental contracts for two-bedroom apartments in Karma and Liwan1. At the Wadi Al Safa 2 district level, the average annual rental rate for all residential apartments over the past year was 735 AED/m² (only residential-use contracts with correct area and rent values were included).

Rental dynamics in the district:
– 2020–2021: 400–460 AED/m²
– 2022: 430–460 AED/m²
– 2023: growth to 530–620 AED/m²
– 2024 Q3–Q4: 657–686 AED/m², early 2025: 730–763 AED/m²

Thus, rental rates have been steadily increasing — by more than 1.5 times over 3 years.

4. ROI and fair price

Calculation based on the last 12 months (benchmark — 2BR units in Karma and the entire district):

– Average purchase price per m² (building): 10,782 AED
– Average purchase price per m² (district): 13,356 AED
– Average annual rent per m² (district): 735 AED

It is not possible to calculate the theoretical gross ROI (ROI_brutto) for Karma itself based on the last 12 months’ sale prices due to the absence of rental data for the building. At the district level, the indicative gross yield is around 5.5% per annum (735/13,356).

Taking into account entry transaction costs (around 7%), the net yield (ROI_net) will be approximately 5.1% per annum. This is a standard level for fast‑appreciating districts with limited supply and a dominance of new projects (which has been characteristic of Wadi Al Safa 2 over the last two years).

The fair purchase price range for achieving a 7–8% annual yield in the district is around 9,200–10,500 AED/m². The current average price in Karma (2BR) — 10,782 AED/m² — is slightly above the upper bound for an 8% yield, but within the range for a 7% yield. This indicates strong investment activity and a focus more on capital appreciation than on rental income.

If one focuses solely on rental yield (excluding capital growth), the current price level requires some discount to return to the 7.5–8% annual yield range.

5. Liquidity and trends

In terms of transaction volume, Karma demonstrates high liquidity, with a significant number of 2BR purchases over the last 12 months. The district as a whole also shows growing demand: both transaction volumes and rental contracts have increased sharply in recent years.

Price dynamics: Over the past two years, Wadi Al Safa 2 has shifted from an undervalued to a growth market, as evidenced by the sharp increase in both sale prices and rents. Karma is still trading below the district average, offering an opportunity for medium‑ and long‑term investment with a focus on capital growth.

Rentals: There is a clear shortage of rental supply, while district rental rates are rising at an accelerated pace.

6. Investor takeaways

– Karma is a highly liquid residential complex in a rapidly developing district that is still trading slightly below the average market level.
– Current rental yields in the district are around 5–5.5% per annum; to reach 7–8%, a discount to current prices is required.
– The asset is primarily attractive for investors targeting further price appreciation rather than maximum rental income, although the trend points to sustained growth in both sale prices and rents.