Abu Dhabi’s residential rental market is experiencing significant upward momentum, with apartment rents surging 14.2% year-on-year in Q3 2025 according to Cavendish Maxwell research. This substantial growth stems from a perfect storm of demographic expansion and supply limitations that continue to reshape the capital’s real estate landscape.
The driving forces behind this rental escalation include robust population growth, particularly among expatriates and the expanding workforce, creating unprecedented demand for housing. Despite new apartment supply entering the market throughout the year, exceptionally high absorption rates have maintained critically low vacancy levels, sustaining upward pressure on rental prices across the emirate.
Market analysis reveals a distinct performance divergence between property types. Apartments significantly outpaced villas in rental growth, recording a 12.8% annual increase compared to villa rents which grew at a more moderate 5.6% pace. According to Haider Tuaima, Managing Director and Head of Real Estate Research at ValuStrat, rental values demonstrated notable strength with the rental index advancing 2.3% quarterly and 9.3% annually.
The supply pipeline presents a complex picture. Developers are projected to deliver approximately 8,000 new residential units by end-2025, with an additional 12,800 anticipated in 2026. However, industry experts caution that actual deliveries frequently fall short of initial projections. Andrew Laver, Associate Director at Cavendish Maxwell Abu Dhabi, notes that ‘based on recent handover trends, we could see fewer-than-planned properties being delivered in the next couple of years.’ This staggered delivery approach, historically typical for Abu Dhabi, allows gradual market absorption and prevents sudden stock increases.
The sales market mirrored rental sector strength, with Q3 2025 recording robust transaction volumes exceeding 6,400 residential unit sales totaling Dh20.5 billion. Off-plan purchases dominated the market, accounting for Dh16.3 billion of total sales value. Market analysts anticipate both sales and rental prices will continue their upward trajectory in the near term, though growth rates will vary across locations as new supply enters specific market segments.