Abu Dhabi Rental Market Trends
Tenants in Abu Dhabi are increasingly preferring contemporary residences that offer improved amenities, leading to a decrease in demand for older properties in the city. Real estate analysts note that tenants are also avoiding relocation due to the high costs and higher rental prices for new properties.
Rental Price Increases
According to the global real estate agency JLL, rental prices for apartments and villas in Abu Dhabi rose by 13.9 percent and 4.7 percent, respectively, in the 12 months until June 2025. This increase in rental prices is attributed to the shift in tenant preferences towards modern residences with better amenities.
Extension of Rental Agreements
The extension of rental agreements accounted for 65.7 percent of total rental contract registrations in the second quarter of 2025, compared to 61.6 percent in the previous year. This increase is partly due to tenants choosing to maintain their current accommodations and avoid potential rent increases associated with relocation. The renewal of leasing relationships rose by 16.6 percent, while new contracts decreased by 2.1 percent.
Growth in Rental Contracts
The total volume of rental contracts showed strong growth of 9.4 percent compared to the corresponding period of the previous year, supported by steady population growth. Real estate advisors attribute this growth to the continued upward trend in the rental market, driven by strong macroeconomic conditions and population growth.
New Residential Units
Abu Dhabi saw a significant number of new supplies and project launches in response to increasing demand. The city added around 3,400 residential units in the second quarter of 2025, increasing the total residential stock to around 292,000 units. An additional 10,400 units are planned by the end of the year.
Residential Launches
The second quarter of 2025 saw a wave of high-end residential launches, including Fahid Beach Residences and Waldorf Astoria Residences Yas. These launches have contributed to expanding the pipeline of residential development significantly, with an estimated 70,000 units expected in the next five years, including 10,000 units this year.
Real Estate Prices
Real estate prices retained their upward trend in the second quarter of 2025. The average sales prices for apartments and villas in Abu Dhabi rose by 14.4 percent and 11.1 percent, respectively. The average rate per square meter of transactions in key investment locations for apartments, townhouses, and villas was 1,515 AED, 1,552 AED, and 1,784 AED, respectively.
Sales Transfer Volume
The sales transfer volume increased by 9.1 percent in the second quarter of 2025 compared to the same period of the previous year, despite a small decline of 2.7 percent in the off-plan segment. This growth was supported by a 32.6 percent increase in secondary market sales, although off-plan transactions continued to hold a majority market share. The secondary market showed continued growth in the second quarter, extending a trend observed since the beginning of the year.
