Today's Edition
MAYS IBRAHIM (ABU DHABI)
Tenants in Abu Dhabi are increasingly opting to renew existing leases rather than relocate, according to JLL UAE Living Market Dynamics analysis for the second quarter of 2025.
The report showed that rental contract renewals accounted for 65.7% of total rental contract registrations in Q2 2025, up from 61.6% a year earlier.
“This increase is in part being underpinned by tenants opting to maintain their current residences and avoid potential rental increases associated with relocation,” it stated.
The consultancy said the trend reflects tenants’ efforts to avoid higher costs linked to moving.
Lease renewals increased by 16.6%, while new contracts decreased by 2.1% but overall residential lease volumes grew 9.4% year-on-year.
“This highlights the robust rental demand in Abu Dhabi, underpinned by steady population growth,” the report said.
Dubai’s rental market recorded a similar trajectory, with renewals making up 63% of contracts.
New agreements rose 14.3% compared to a year earlier, while renewals increased 9.9%, driving total registrations up by 11.5%.
In Abu Dhabi, rental rates for apartments and villas increased by 13.9% and 4.7%, respectively, in the 12 months to June 2025, according to the report.
It noted that tenant preferences have shifted toward newer developments with enhanced amenities and lifestyle features, diminishing interest in older properties.
Looking ahead, JLL said rising appetite for branded residential projects is expected to fuel demand in Abu Dhabi, as developers bring more luxury names into the market.
“Investors benefit from these branded properties as they generally sell at higher price points than similar non-branded options, potentially yielding higher investment returns and maintaining their value more effectively,” the report said.
In Dubai, rents showed signs of stabilising: apartment rents rose 7.2% and villas 5.3% annually, though quarterly data indicated a slowdown, including a 0.6% decline in villa rents.
JLL noted that these adjustments point to healthier long-term growth, even as landlords may see yields soften in some areas.
Sales prices also advanced in both cities. In Abu Dhabi, apartment values increased 14.4% and villas 11.1% year-on-year in Q2, while average transaction prices in key investment zones reached Dh15,182 per square metre for apartments and Dh17,845 for villas.
Dubai prices, though moderating from last year’s pace, remained at record highs, with apartments up 13.3% and villas 16% annually.
Abu Dhabi recorded a 9.1% rise in sales transactions, led by a 32.6% surge in the secondary market, while Dubai posted a 22.8% increase driven largely by off-plan sales.
Supply pipelines also expanded, according to the report. Abu Dhabi added 3,400 units in Q2 and plans 10,400 more by year-end, while Dubai delivered 12,000 homes and expects an additional 22,000 in the second half of the year.
