In Abu Dhabi, tenants are increasingly drawn to modern residences with superior amenities, leading to a decline in demand for older properties in the UAE capital.
Real estate experts note that tenants are hesitant to relocate due to high costs and increased rental prices for new homes.
JLL, a global real estate agency, reports that in Abu Dhabi, apartment and villa rental rates rose by 13.9% and 4.7%, respectively, in the year leading up to June 2025.
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“Tenant preferences have moved towards contemporary homes with enhanced amenities, thereby reducing interest in older properties,” JLL analysts stated.
Renewals of rental contracts accounted for 65.7% of total registrations in Q2 2025, up from 61.6% the previous year.
“This rise is partly due to tenants choosing to stay put to avoid potential rent hikes from moving. Lease renewals grew by 16.6%, while new contracts fell by 2.1%,” according to JLL analysts.
Overall, the real estate consultancy highlighted a 9.4% growth in residential lease volume compared to the previous year, driven by steady population growth.
CBRE analysts observed that the rental market in Abu Dhabi continued its upward trend during April-June 2025, supported by strong economic conditions and steady population growth.
“Rental growth was visible across all communities tracked, with Yas Island leading the way,” CBRE analysts commented.
New Developments
Abu Dhabi is experiencing a surge in new projects and launches due to rising demand.
According to JLL, Abu Dhabi added approximately 3,400 residential units in Q2 2025, bringing the total housing stock to around 292,000 units, with an additional 10,400 units expected by year’s end.
The second quarter of 2025 saw numerous 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, as reported by real estate investment and services firm CBR.
These projects have significantly boosted the residential development pipeline, with an estimated 70,000 units anticipated over the next five years, including 10,000 this year.
Property prices maintained an upward trajectory in the second quarter of this year.
JLL data indicates that average sales prices for apartments and villas in Abu Dhabi rose by 14.4% and 11.1%, respectively, in Q2 2025 compared to the same period last year. During this quarter, the average price per square metre for apartments, townhouses, and villas in key investment areas was Dh15,182, Dh15,523, and Dh17,845, respectively.
In the capital, sales transaction volume increased by 9.1% in Q2 2025 compared to the same period last year, despite a 2.7% decline in the off-plan segment. This growth was supported by a robust 32.6% increase in secondary market sales, though off-plan transactions still held a majority market share. The secondary market continued its growth trend in the second quarter, a pattern observed since the start of the year.
