Abu Dhabi Rentals See Record Occupancy, Waitlists
Some residential areas in Abu Dhabi are experiencing historically high occupancy rates, with specific properties having waiting lists for potential tenants, especially in the high-end and luxury sectors.
Luxury residential projects in Abu Dhabi, especially waterfront neighborhoods like Al Raha Beach, Saadiyat, Yas and Reem Islands, continued to be popular. According to the second quarter 2024 report from real estate consultancy Asteco, landlords in these regions experienced high occupancy rates, with some properties having waiting lists.
Rent prices in the UAE have increased following the Covid-19 pandemic as a result of the growing population in Abu Dhabi, Dubai, and other emirates.
Abu Dhabi's population exceeded Dubai's last year, reaching 3.8 million and making it the most populous emirate in the UAE. Since 2011, the population of the capital of the UAE has surged by 83%, leading to a high demand for accommodations among new renters.
ValuStrat's first quarter report for 2024 indicated that 80.7 per cent was the average occupancy rate for 50,000 homes in the sample. Nonetheless, some of the high-end properties experience significantly greater occupancy rates.
Asteco data shows that around 2,400 housing units were completed in Abu Dhabi in the second quarter of 2024, particularly in Noya on Yas Island, Jubail Island, Masdar City, Al Raha Beach, and other locations.
At the moment, multiple residential and mixed-use projects are in the planning phase, and they are expected to be publicly launched in various stages throughout 2024.
CBRE, another real estate consulting firm, reported that in the first half of 2024, a total of 1,445 units were added to the market, with Al Maryah Island and Yas Island accounting for 87 percent of this new supply. In the upcoming months, a total of 6,791 units will be delivered, with 42.3 percent allocated for Al Sowwah and Yas Island.
Increase in middle and high-tier rental market.
Strong activity was seen in the Abu Dhabi rental market in the second quarter, especially in high-end apartment and villa areas. The average cost of renting an apartment slightly rose by 1 per cent over the quarter and 2 per cent over the year. Nevertheless, certain regions experienced significant growth, with quarterly rises of almost 5 per cent and annual growth climbing as high as 10 per cent, according to Asteco.
Villa rental rates stayed consistent, showing a 5% rise in the last year.
Mid-range accommodations, especially those located in the central business district and Corniche areas, also experienced minor rises in rent. Similar mid-range properties in highly sought-after investment locations such as Reem and Yas Islands saw an annual increase of more than 5 percent.
Properties at the lower end of the market remained stable, mainly because landlords were providing appealing lease terms to attract tenants. Yet, the focus on excellence continued to be a key factor in the slight increase in rental prices overall. Asteco stated that older properties without modern amenities could experience small decreases in rental prices.
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