Rent in the UAE: Record rates of occupancy in some localities, but waiting lists elsewhere
Published Date: 27th Aug, 2024
Rent in the UAE: Record rates of occupancy in some localities, but waiting lists elsewhere
In several residential communities in Abu Dhabi, occupancy rates are reaching all-time highs. Several buildings, especially in the prime and premium segments, have waiting lists for potential renters.
Saadiyat, Al Raha Beach, Yas, and Reem Islands are just a few of the coastal areas in Abu Dhabi that continue to be in high demand for prime and upscale residential complexes. According to real estate consulting firm Asteco's second quarter 2024 report, which was released on Tuesday, landlords in these locations saw strong occupancy rates and some even had waiting lists.
From Covid 19
As a result of the Covid-19 pandemic and the increasing number of people in Abu Dhabi, Dubai, and other emirates, rents for the apartments, villas, penthouses, townhouses etc. have increased throughout the United Arab Emirates.
With 3.8 million residents last year, Abu Dhabi surpassed Dubai to be the most populous emirate in the United Arab Emirates. Since 2011, the population of the UAE capital has increased dramatically by 83%, which has led to a high demand for apartments from potential tenants.
In the initial quarter of the 2024 study, ValuStrat reported that 80.7 percent of a sample of 50,000 residences had an average occupancy rate. Nonetheless, a few wealthy establishments see significantly greater occupancy rates.
Around 2,400 dwellings were handed over in the UAE capital in Q2 2024, mostly in Masdar City, Noya upon Yas Island, Jubail Island, Al Raha Beach, and other locations, according to Asteco statistics.
In the meanwhile, several mixed-use and residential developments are presently in the planning phase, with projected public debuts taking place throughout 2024.
In the initial half of 2024, 1,445 units were added to the supply, according to another real estate company CBRE. Al Maryah Island & Yas Island accounted for 87% of this stock. Six, 791 units are expected to be delivered for the rest of the year, with 42.3% going to Yas Island and Al Sowwah.
Growth in the mid-and high-end rental market
The second quarter saw a lot of activity in the Abu Dhabi rentals market, especially in premium apartment and villa sites. The average yearly and quarterly rise in apartment rent was 2% and 1%, respectively. Some regions, according to Asteco, experienced more significant development, with quarterly rises approaching 5% and yearly growth up to 10%.
Villa rentals continued to perform steadily, showing a 5% rise in the previous 12 months.
Mid-range properties saw marginal improvements in rental income as well, particularly those near the Corniche and core business center. Comparable mid-range real estate saw an annual increase of more than 5% in desirable investment locations like Reem & Yas Islands.
Lower-end properties demonstrated stability, mostly as a result of landlords enticing tenants with favorable lease terms. Nonetheless, the focus on quality persisted as a motivator, helping to fuel the generally moderate increase in rental income. Rental rates in Dubai for older residences like apartments, villas, penthouses, etc. without contemporary amenities may be slightly reduced, according to Asteco.
Date: 27th Aug, 2024
