Abu Dhabi launches first Rental Index to offer greater transparency in property market
New index to help tenants and landlords alike as more properties land up for rentals
Dubai: Abu Dhabi tenants can soon track trends in the property market through a newly introduced rental index.
The index is available on adrec.gov.ae. It is overseen by the Abu Dhabi Real Estate Centre (ADREC). It covers rental ranges in Al Ain too.
“The Rental Index will energise the rental market in Abu Dhabi and further contribute to the emirate’s competitive edge to attract international investors," said Rashed Al Omaira, Acting Director General, Abu Dhabi Real Estate Centre.
“This initiative will increase the attractiveness of the real estate sector and contribute to our efforts to create a more sustainable and resilient market.”
The Abu Dhabi real estate market has seen its share of rental increases in recent years, and the new Rental Index will help create benchmarks or reset existing ones when it comes to leasing activity.
It is at the top end of the residential rental market that Abu Dhabi has seen significant new leasing activity as more homes are handed over on Yas, Saadiyat and Reem islands. Rent gains have maintained a narrow range in the latest quarters.
"Average apartment rents saw modest quarterly and annual increases of 1- and 2 per cent, respectively," says a new report from Asteco. "However, select developments/areas registered more substantial growth, with quarterly increases nearing 5 per cent and annual growth reaching up to 10 per cent."
The property services firm has Yas Island two bedroom apartments renting for Dh105,000 to Dh135,000 on average. On saadiyat Island, a similar apartment would be in the Dh80,000-Dh110,000 range.
When it comes to more mid-tier apartment choices, 'especially those in the CBD (Central Business District) and Corniche areas 'also recorded slight rental increases'. "Comparable mid-end properties in prime investment areas like Reem and Yas Islands experienced annual growth of over 5per cent," the Asteco report finds.
"Properties at the lower end of the market exhibited stability, primarily due to landlords offering attractive lease terms to entice tenants. However, the emphasis on quality remained a driving force, contributing to overall modest rental growth. Older properties lacking modern amenities may face slight downward adjustments in rental rates."