Rising Rents In Abu Dhabi: Tenants Avoid Relocations Amid High Rates For New Properties

Tenants in Abu Dhabi are increasingly preferring contemporary residences that offer enhanced amenities; therefore, demand for older properties is diminishing in the UAE capital.

Real estate analysts say that tenants are also avoiding relocations due to huge associated costs and higher rental rates for the new properties .

According to global real estate agency JLL, in Abu Dhabi, rental rates for apartments and villas increased by 13.9 per cent and 4.7 per cent, respectively, in the 12 months to June 2025.

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“Tenant preferences have shifted toward contemporary residences offering enhanced amenities and lifestyle features, consequently diminishing demand for older developments,” JLL analysts said.

Rental contract renewals accounted for 65.7 per cent of total rental contract registrations in the second quarter of 2025, up from 61.6 per cent a year earlier.

“This increase is in part being underpinned by tenants opting to maintain their current residences and avoid potential rental increases associated with relocation. Lease renewals increased by 16.6 per cent, while new contracts decreased by 2.1 per cent,” said JLL analysts.

Overall, the real estate consultancy added that the total volume of residential leases demonstrated strong growth of 9.4 per cent compared to the corresponding period in the previous year, helped by steady population growth.

CBRE analysts said the UAE capital's rental market continued its upward trajectory during April-June 2025 period, helped by strong macroeconomic conditions and a sustained population growth.

“Rental growth was evident across all tracked communities... with Yas Island leading gains,” CBRE analysts said.

Abu Dhabi has seen a good number of new supplies as well as project launches due to rising demand.

The UAE capital, as per JLL data, has added about 3,400 residential units in the second quarter of 2025, increasing the total housing stock to around 292,000 units. An additional 10,400 units are scheduled for completion by the end of the year.

Real estate firm investment and services firm CBR said the second quarter of 2025 saw a wave of high-profile residential launches, including Fahid Beach Residences and Waldorf Astoria Residences Yas by Aldar, St. Regis Al Maryah Island by Saas Properties, and Nawayef Village by Modon.

These launches have helped to significantly expand the residential development pipeline, with an estimated 70,000 units expected for delivery over the next five years, including 10,000 units this year.

Property prices also maintained their upward trend in the second quarter of this year.

JLL data showed average apartment and villa sales prices in Abu Dhabi increased by 14.4 per cent and 11.1 per cent, respectively, in Q2 2025, compared to the same period last year. During the second quarter, the average rate per square metre of transacted sales in key investment locations for apartments, townhouses and villas stood at Dh15,182, Dh15,523 and Dh17,845, respectively.

In the capital, sales transaction volume increased by 9.1 per cent in Q2 2025 compared to the same period last year, despite a modest decline of 2.7 percent in the off-plan segment. This growth was supported by a robust 32.6 per cent increase in secondary market sales, although off-plan transactions continued to maintain a majority market share. The secondary market has demonstrated continued growth in the second quarter, extending a trend observed since the beginning of the year.

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