Today's Edition
A. SREENIVASA REDDY (ABU DHABI)
Residential rents in Abu Dhabi have seen an average year-on-year growth of 16%, while Al Ain recorded a 5% rise over previous lease agreements in the third quarter of 2025, according to the latest market update from Colliers, a global professional services and investment management company.
The report noted that the mid- and low-end rental segments in Abu Dhabi recorded the strongest increases, rising between 10% and 30% annually on the back of elevated demand from the emirate’s growing working population.
Apartment rents in Abu Dhabi rose 5% quarter-on-quarter, while villa rents increased between 2% and 11% over the same period.
Colliers said the emirate’s strong rental performance is underpinned by structural economic and demographic trends. “As we approach the final quarter of 2025, Abu Dhabi’s real estate market is expected to maintain strong momentum, supported by several structural drivers. Sustained population growth, continued inward migration, and robust economic fundamentals are fuelling demand across residential segments,” the report said.
“These dynamics, combined with proactive government housing initiatives and ongoing infrastructure investment, reinforce market confidence and suggest further upward pressure on both capital values and rental rates.”
On the supply side, Abu Dhabi saw a steady level of new inventory enter the market. The report’s supply tables show that 3,550 apartments and 1,000 villas were completed in H1 2025, followed by an additional 800 apartments and 600 villas in Q3 2025, bringing the year-to-date total to nearly 6,000 units. A further 500 apartments and 500 villas are projected for completion in Q4 2025, maintaining the emirate’s consistent delivery pipeline.
The Colliers analysis also highlights the completion of approximately 1,400 units in Q3, concentrated on Yas Island, Jubail Island and Al Raha Beach, where several master-planned communities have reached key handover stages.
Rental benchmarks in Abu Dhabi continue to vary widely between premium coastal districts and the mid-market investment zones outside the island. Prime apartments on Saadiyat Island, Al Raha Beach and parts of the Corniche are achieving annual rents of around Dh75,000 to Dh80,000 for studios, Dh75,000 to Dh130,000 for one-bedroom units, and Dh125,000 to Dh175,000 for two-bedroom units, depending on age, specification and amenities.
In mid-market areas such as Khalifa City, MBZ City and Baniyas, studios typically lease for Dh35,000 to Dh50,000, while one-bedroom units range between Dh55,000 and Dh80,000, and two-bedroom apartments between Dh85,000 and Dh125,000. At the more affordable end of the spectrum, studios on Abu Dhabi Island generally range from Dh35,000 to Dh45,000, with one-bedroom units between Dh40,000 and Dh60,000, and two-bedrooms from Dh60,000 to Dh85,000, according to the detailed rental matrix in the report.
The third quarter also saw a notable level of new project activity. Abu Dhabi recorded several major launches, including a new Masdar City residential community by Taraf and Masdar, Four Seasons Private Residences on Saadiyat Island, and Fahid Beach Terraces on Fahid Island. In addition, the Abu Dhabi Housing Authority confirmed 13 new residential communities totalling 40,000 homes and plots for Emiratis, with six of those communities comprising over 14,000 units within the Abu Dhabi Region, marking one of the largest coordinated housing announcements in recent years.
In Al Ain, the residential market continued to show stable and incremental growth. New lease agreements in Q3 were approximately 5% higher than previous contracts, with apartment rents up by as much as 9% year-on-year and villa rents up by around 3%. Rental levels in mature apartment buildings typically stand at Dh28,000 to Dh31,000 for one-bedroom units and Dh36,000 to Dh39,000 for two-bedroom units, rising to Dh31,000 to Dh36,000 for one-bedrooms and Dh39,000 to Dh43,000 for two-bedrooms in new developments. Prime compounds achieve higher rates, with one-bedrooms leasing between Dh35,000 and Dh38,000, two-bedrooms between Dh44,000 and Dh48,000, and three-bedrooms reaching Dh60,000 to Dh80,000.
Villa rents in Al Ain reflect similar segmentation, with three-, four- and five-bedroom units ranging from Dh48,000 to Dh52,000 in older stock, to Dh115,000 to Dh140,000 for larger homes in premium compounds. Colliers noted that demand in Al Ain remains supported by population stability, affordable living costs and continued investment in community infrastructure.
Al Ain also saw significant development momentum during the quarter. The report highlights the announcement of five new local housing projects totalling approximately 10,500 units. The upcoming Al Wadi Commercial Complex, scheduled for completion in the first quarter of 2026, is expected to strengthen Al Ain’s retail and services offering and support surrounding residential districts.
Across both markets, Colliers said that strong demand fundamentals, steady development pipelines and ongoing government-led planning initiatives are likely to support continued rental and capital value growth into the final quarter of 2025 and early 2026.
