SADEQ ALKHOORI (ABU DHABI)
Abu Dhabi’s next housing question is not only how fast its real estate market is growing. It is whether new supply can reach the residents most exposed to rental pressure: middle-income families, working professionals and tenants seeking practical homes in well-connected areas.
That question came to the fore after the Department of Municipalities and Transport and Aldar announced plans to deliver 9,000 value housing rental units in Mohamed Bin Zayed City and Baniyas. The Dh2.8 billion projects form part of DMT’s Value Housing Programme and are expected to be delivered by 2029.
Under the agreement, Aldar will develop, lease and manage the communities, while DMT will provide long-term leasing rights over the land.
The announcement comes as Abu Dhabi’s property market continues to record strong activity. Abu Dhabi Real Estate Centre said total real estate transactions reached Dh66 billion in the first quarter of 2026, up 160.7% year on year, marking the emirate’s highest quarterly performance on record.
Experts said the effect of the new supply will depend on pricing, phasing and whether the homes remain aligned with middle-income demand.
Rohit Bachani, Co-Founder of Merlin Real Estate, said the 9,000-unit pipeline is meaningful because it comes after a period of tight supply and strong rental growth, particularly in the value and mid-market segments.
“A dedicated pipeline of 9,000 value housing units is meaningful because it is roughly equivalent to about a year’s worth of typical new residential supply at current run rates, even though it will be phased through to 2029 rather than arriving at once,” Bachani told Aletihad.
He said the projects are unlikely to reverse the market, but could soften pressure in the middle if they remain aligned with value and mid-market needs.
“This will not ‘deflate’ Abu Dhabi’s rental market. Fundamentals are still tight,” he said. “But it can take some heat out of the middle of the market and create a clearer ladder between value, mid-market and premium rentals over the next three to five years.”
For tenants, that distinction matters. Rental pressure is felt in renewals, location compromises, longer commutes and the search for homes that match household income.
“For families who have been pushed further out or forced to compromise on quality, this is less about a sudden rent correction and more about finally seeing credible, large-scale alternatives at attainable price points,” Bachani said.
Naresh Perwani, Founder and Chairman of Neoterra Developments, said value housing differs from premium residential development because it is built around accessibility and practical living rather than exclusivity.
“Value housing is about accessibility and practicality,” he said. “Unlike traditional premium developments that focus on exclusivity and luxury positioning, it is designed to provide quality living spaces at more attainable prices for middle-income residents, professionals and families.”
He said the concept depends not only on affordability, but on whether residents can access transport, schools, retail and essential amenities within well-connected neighbourhoods. “The focus is not just affordability but also smart community planning,” Perwani said.
Bachani said pricing and renewals will determine whether the developments help create a more balanced rental market once they open. “The true test will be how initial pricing and renewal increases compare to the broader market once the projects open closer to 2029,” he said.
The programme does not mean rental pressure will disappear. Its importance lies in whether targeted rental supply can give middle-income residents more credible options in the areas where demand is strongest.