Occupancy levels in some residential communities in Abu Dhabi are reaching unprecedented highs, with waiting lists becoming common, especially in prime and luxury segments.
“Prime and high-end residential developments in Abu Dhabi, particularly waterfront communities such as Al Raha Beach, Saadiyat, Yas, and Reem Islands, have seen sustained high demand. Landlords in these areas are enjoying robust occupancy rates, with some properties even having waiting lists,” reported real estate consultancy Asteco in its second quarter 2024 report released on Tuesday.
The rise in rents across the UAE post-Covid-19 pandemic is attributed to the growing population in Abu Dhabi, Dubai, and other emirates. Abu Dhabi’s population surged to 3.8 million last year, surpassing Dubai, making it the most populous emirate in the UAE. The capital’s population has grown by 83 percent since 2011, driving strong demand for residential units from new tenants.
ValuStrat‘s first quarter of 2024 report indicated that the average occupancy rate among a sample of 50,000 homes was 80.7 percent, with luxury properties boasting even higher occupancy levels.
Asteco’s data revealed that around 2,400 residential units were delivered in Abu Dhabi during Q2 2024, notably in areas like Noya on Yas Island, Jubail Island, Masdar City, Al Raha Beach, and others.
Several residential and mixed-use projects are currently in planning, with public launches expected throughout 2024. Real estate consultancy CBRE reported that developers completed 1,445 units in the first half of 2024, mainly on Al Maryah Island and Yas Island. They will deliver another 6,791 units later in the year, with significant additions in Al Sowwah and Yas Island.
Rise in Mid and High-End Segment Rentals
The Abu Dhabi rental market saw robust activity in the second quarter, particularly in upscale apartment and villa locations. Average apartment rents experienced modest quarterly and annual increases of 1 percent and 2 percent, respectively. However, some areas saw more significant growth, with quarterly increases approaching 5 percent and annual growth reaching up to 10 percent, according to Asteco.
Villa rents showed steady performance, with a 5 percent increase over the past 12 months.
Mid-tier properties, particularly in the central business district and Corniche areas, also recorded slight rental increases. Comparable mid-end properties in prime investment locations like Reem and Yas Islands saw annual growth of over 5 percent.
Lower-end market properties remained stable, primarily due to landlords offering attractive lease terms to attract tenants. “Quality remains a key driver, contributing to overall modest rental growth. Older properties lacking modern amenities may face slight downward adjustments in rental rates,” added Asteco.