Occupancy levels in several residential areas of Abu Dhabi are reaching unprecedented heights, with some properties, especially in the prime and luxury segments, maintaining waiting lists for prospective tenants. High-end developments, particularly those in waterfront locations like Al Raha Beach, Saadiyat, Yas, and Reem Islands, continue to be in high demand. Landlords in these regions are experiencing robust occupancy rates, with a few properties even having waitlists, according to the second-quarter 2024 report by real estate consultancy Asteco. Rental prices have been on an upward trend across the UAE since the Covid-19 pandemic, driven by a growing population in Abu Dhabi, Dubai, and other emirates.
Abu Dhabi’s population reached 3.8 million last year, surpassing Dubai and making it the most populous emirate in the UAE. The capital has seen a significant population increase of 83% since 2011, leading to a strong demand for residential units. ValuStrat’s first-quarter 2024 report revealed that the average occupancy rate across a sample of 50,000 homes stood at 80.7%, with luxury properties achieving even higher rates. Asteco’s data indicates that approximately 2,400 new residential units were completed in Abu Dhabi during Q2 2024, with notable developments in Noya on Yas Island, Jubail Island, Masdar City, and Al Raha Beach, among other areas. Additionally, several residential and mixed-use projects are currently in the planning stages, with public launches expected throughout 2024. CBRE, another real estate consultancy, reported that 1,445 new units were completed in the first half of 2024, with 87% of these located on Al Maryah Island and Yas Island. For the remainder of the year, 6,791 units are scheduled for completion, with 42.3% of them set to be delivered in Al Sowwah and Yas Island.
Increase in Rentals for Mid-Range and High-End Properties
The Abu Dhabi rental market showed strong performance in the second quarter, particularly in higher-end apartment and villa locations. On average, apartment rents experienced modest growth, with quarterly and annual increases of 1% and 2%, respectively. However, certain areas saw more significant gains, with some locations reporting quarterly increases close to 5% and annual growth of up to 10%, according to Asteco. Villa rents remained steady, reflecting a 5% increase over the past year. Mid-tier properties, especially those in central business districts and Corniche areas, also saw slight rental increases. Similarly, mid-range properties in prime investment zones like Reem and Yas Islands recorded annual growth exceeding 5%. Lower-end market properties demonstrated stability, as landlords offered appealing lease terms to attract tenants. Nonetheless, the focus on quality continued to drive overall rental growth, while older properties lacking modern amenities may face slight decreases in rental rates, Asteco noted.
Original source: UAE rents: Waiting lists in some communities amid record occupancy rates in Abu Dhabi – News | Khaleej Times
