High demand for home rentals in Abu Dhabi has left house-hunters struggling to find suitable and affordable accommodation, property experts have told The National.
The emirate recorded a significant increase in residential rental contracts during the first half of 2024, with 49,135 contracts registered, according to data released by the Statistics Centre – Abu Dhabi last week.
This is an increase of 24,811 contracts compared to the same period last year, demonstrating a 102 per cent growth.
“The residential rental market in Abu Dhabi is buzzing right now with lots of activity,” said Mubarak Al Amry, owner of Abu Dhabi-based property agency Mi Casa Real Estate.
“This is mostly because the city is a hot spot for expatriates and professionals, thanks to its strong economy and high quality of life.”
More than 10 residential projects are expected to be completed by the first quarter of 2025, but the current supply, especially in prime areas, is often unable to meet the growing demand, said Svetlana Politova, chief operating officer of real estate agency Whitewill Abu Dhabi.
“This limited supply intensifies competition for available units, pushing rental rates higher,” she added.
Mr Al Amry said many of his clients have struggled to find suitable accommodation “because you can book the unit today [but] the next hour it’s not available any more”.
Al Ain city also experienced a 77 per cent rise in documented rental contracts, while Al Dhafra region reported 331 contracts compared to 144 last year.
This record growth in the property market is fuelled by growing confidence in the city among local and international high-net-worth individuals, said Diana Nilipovscaia, chief executive of international real estate developer Mered.
“Abu Dhabi’s competitive pricing, at about one-third more affordable than Dubai, has made it an attractive market for both high-net-worth domestic and international buyers who are willing to spend $408.3 million on residential property, further stimulating the rental market,” she added, citing a recent report by Knight Frank.
Ms Politova agreed the city’s robust economic growth and stability make it an attractive destination for professionals, entrepreneurs and investors.
“As one of the main economic hubs in the Middle East, Abu Dhabi draws a diverse population seeking a stable and prosperous environment,” she told The National.
“Abu Dhabi offers exceptional quality of life, with world-class infrastructure, luxurious amenities and a rich array of cultural and recreational options, and this appealing lifestyle attracts both residents and visitors, further driving up rental demand.”
Luxury homes in demand
Upscale apartments and villas are particularly popular in the emirate, according to Asteco’s latest UAE real estate market report.
Landlords in Abu Dhabi’s prime residential areas, particularly in waterfront communities such as Al Raha Beach, Saadiyat, Yas and Al Reem Islands, have benefitted from strong occupancy rates and some properties are now on waiting lists, Asteco stated.
Dubizzle’s latest report on the capital’s rental property market for H1 2024 found mixed trends for average rents among apartments and villas. Compared to H2 2023, the average rent for luxury villas has gone up by 12 per cent, whereas the average yearly rent for high-end apartments has increased by 14 per cent, it stated.
Mr Al Amry said rental prices can vary quite drastically depending on the type of property and its location. Costs range between Dh45,000 and Dh70,000 per year for studios, while one-bedroom apartments are usually priced from Dh70,000 to Dh100,000 and two-bedroom options range from Dh100,000 to Dh150,000, he said.
Villas are at least Dh150,000 for a three-bedroom, with prices going over Dh300,000 for larger ones.
“One and two-bedroom apartments are especially popular among smaller families and young professionals who want a good mix of convenience and cost,” said Mr Al Amry.
“Villas are also in demand, especially for larger families or those who need more space.”
Key areas like Saadiyat Island, Yas Island, Al Reem Island and Al Raha Beach remain top choices “due to their exceptional amenities and quality of life”, said Ms Politova.
“For potential tenants, this means stable rents in most areas, but expect higher costs in these premium communities.”
Sales on similar trajectory
It’s a similar story for property sales, with Bayut’s Abu Dhabi latest report noting price increases of up to 10 per cent in the affordable category, with an appreciation of up to 6 per cent for luxury apartments and over 10 per cent for villas, for the first half of the year.
chief executive at Mered
The rental price hikes are directly impacting property sales, as more people who have been priced out of renting look for stability in the market.
Abu Dhabi resident Imran Rajwani, for example, bought his first property two years ago after his landlord on Al Reem Island tried to increase his rent for a two-bedroom apartment from Dh62,000 to Dh74,000.
“He gave me the option to move out or pay the same amount,” he told The National. “I realised I would face similar problems if I move to a new place.”
This is when he and his family – his wife, son and parents – decided to buy a two-bedroom apartment on Al Reem Island for Dh980,000. They haven't looked back since, and now consider it their “forever home”.
Ms Nilipovscaia said this robust growth and strong investment potential is what has led her company to expand to the capital with a new residential project, also on Al Reem Island.
“Luxury apartments on Al Reem Island offer a projected rental yield of 6.94 per cent,” she said, adding it was the “ideal location” for Mered's new development.
“The continuous increase in the emirate’s population and foreign direct investment, supported by favourable regulatory framework by Abu Dhabi Global Market and diverse off-plan projects, ensures that Abu Dhabi remains a strong player in the global real estate market, offering long-term stability and growth potential for investors.”
‘Be flexible with preferences’
Mr Al Amry advised house-hunters to remain flexible with preferences as they navigate this competitive rental market.
“It’s a good idea to start your search early and check out different neighbourhoods,” he said.
Ms Politova said thoroughly researching the location is key. “Look beyond the property itself to understand the area’s infrastructure, amenities and overall vibe,” she said.
“Consider the reputation of the management company, as this can greatly impact your living experience.”
Local community forums can be a “treasure trove” of information, she added. “[They offer] insights and warnings from residents about specific buildings or management companies.”
Finally, keep up to date on the latest developments in the market, said Ms Nilipovscaia.
“Staying informed about the latest market trends will enable you to make well-timed, informed decisions, ensuring you secure the best value for your money.”
