Rents in Abu Dhabi are increasing at a faster pace than property prices due to high demand and limited supply, according to industry experts. The city-wide residential rents have seen a sharp 15% year-on-year rise, with the prime segment driving the growth. On the other hand, property sale prices in the UAE Capital have witnessed a steady 9% increase year on year. This surge in rental prices is mainly driven by demand outpacing supply, especially in prime areas like Saadiyat Island and Yas Island.
According to Prathyusha Gurrapu, head of research and consultancy at Cushman & Wakefield Core, the rental market in Abu Dhabi has experienced the highest annual increase in over a decade. Villas have seen a 10% increase, while apartments have witnessed a 16% rise compared to the previous year. Areas such as Saadiyat Island, Yas Acres, and Al Reef Villas have seen significant rental increases, with Saadiyat Island leading the growth in the luxury segment.
In the second quarter of 2024, Abu Dhabi’s average apartment rents rose by 6.6% year-on-year, while average villa rents grew by 2.5%, as per CBRE data. The average annual rents for apartments and villas were Dh66,375 and Dh166,261, respectively. The trend of rising rents is expected to continue as areas like Yas Island become more desirable for tenants.
The Abu Dhabi Real Estate Centre (ADREC) recently launched the first official rental index for the emirate to enhance market transparency and support market stability. The new rental index serves as a guideline for both tenants and landlords to check ongoing rentals in preferred districts, bringing further stability to the market. The index is expected to provide indicative rental values and help streamline the rental process for both parties.
Demand for existing properties in Abu Dhabi is on the rise, with a growing shift in interest towards ready-to-move-in homes in 2024. While off-plan transactions still constitute a significant portion of total volumes, there has been a 54% increase in ready property transactions compared to the same period in 2023. Additionally, off-plan sales transactions saw a decrease of 19% year-to-date in 2024, attributed to limited launches of new projects and lower launch volumes.
As more units are handed over in Abu Dhabi, including apartments in Al Raha Beach and villas in Jubail Island, Yas Island, and Saadiyat Reserve, the total number of units anticipated for handover in 2024 is around 4,300. Majority of the upcoming deliveries are expected on Reem Island and Yas Island. The real estate market in Abu Dhabi continues to grow, with a focus on meeting the increasing demand for quality residential properties in the capital city.
