Abu Dhabi rents surge 14% as demand from expats outpaces housing supply

Although new apartment supply entered the market during the year, high absorption rates kept vacancy levels low, maintaining upward pressure on rents

Rents in Abu Dhabi are climbing at a double-digit pace as the growing expatriate population absorbs new residential supply, driving vacancy rates lower. With supply constraints and an influx of smaller families and other expats, coupled with project deliveries falling short of initial targets, rental prices are expected to continue rising in the capital.

According to new research by Cavendish Maxwell, apartment rental rates in Abu Dhabi continued to rise in the third quarter of 2025, recording a citywide year-on-year increase of 14.2 percent.

“Strong population growth, particularly among expatriates and the expanding workforce, supported robust rental demand across the Emirate. Although new apartment supply entered the market during the year, high absorption rates kept vacancy levels low, maintaining upward pressure on rents. With supply expected to remain constrained in the near term, rental rates are likely to increase further,” the real estate consultancy said in its latest study on the UAE capital’s market.

According to Haider Tuaima, managing director and head of real estate research at ValuStrat, rental values registered notable growth in the third quarter of 2025 as its rental index advanced 2.3 percent quarterly and 9.3 percent annually. Apartment rents outpaced villas, rising 12.8 per cent year-on-year, while villa rents grew at a 5.6 percent rate annually.

According to Cavendish Maxwell, the pace of growth may vary across the city depending on new supply delivery and evolving tenant preferences.

Villa rents in Abu Dhabi continued to rise as well in Q3 2025, although at a more moderate pace than apartments, with a citywide year-on-year increase of 5.1 percent.

Demand for villas remained solid across the Emirate, though performance differed by community. Most areas recorded annual rental growth, while several neighborhoods saw rents hold largely steady,” it added.

New residential units in Abu Dhabi

Cavendish Maxwell projected that Abu Dhabi developers will deliver 8,000 new residential units by the end of 2025, with an additional 12,800 on the way in 2026.

It is estimated that another 12,400 units are in the pipeline for 2027 and 21,400 for 2028, but actual deliveries may fall short of initial predictions.

“Based on recent handover trends, we could see fewer-than-planned properties being delivered in the next couple of years. This staggered approach – which is historically typical for Abu Dhabi—allows the market to absorb new supply gradually and prevents sudden increases in available stock,” said Andrew Laver, associate director, Cavendish Maxwell Abu Dhabi.

Some 2,700 apartments, townhouses, and villas came to the market in the UAE capital during the first nine months of the year, with sustained demand among end-users and investors, the company said.

Haider Tuaima said the new housing supply remained constrained, with only 10.3 per cent of the projected 2025 pipeline delivered as of September. However, around 33,000 new residential units are expected to be completed over the next five years.

Robust Q3 property sales

Abu Dhabi saw a strong sales performance in Q3 this year, with more than 6,400 residential unit transactions across apartments, villas and townhouses, dominated by the off-plan segment. Apartment sales accounted for 5,100 of all transactions. Sales of villas and townhouses rose 0.3 per cent year-on-year, with limited new launches pushing buyers towards apartments.

Residential unit sales values reached Dh20.5 billion between July and September, with off-plan purchases accounting for Dh16.3 billion of the total.

We expect both sales and rental prices to rise further in the near term, although the pace of growth will vary depending on location as new supply enters the market,” said Andrew Laver.