Ultimate guide to renting in Abu Dhabi in 2020

Whether you’re after a short-term flat-share in a city-centre apartment or a long-term family home in a villa in the suburbs – there’ll be a property with your name on it. And it doesn’t have to be as complicated or expensive to rent a new place as you might believe. We’ve spoken to experts from top property firms in Abu Dhabi to get the lowdown on the rental market right now, including the best-value areas to look at for the year ahead.

The state of Abu Dhabi’s rental market

This year has been turbulent – and if you’ve been looking to move house, whether as a result of the global pandemic or not – there are deals out there. According to the latest market report from Chestertons, rents saw a higher rate of decline over Q2, with average rates down by 2.2% for apartments and 2% for villas, on a quarterly basis. This compares to declines of 1% for apartments and 0.6% for villas over Q1 2020. Annually, Abu Dhabi apartment rents declined by 4.7% on average, while villa rents were down by 4.6%. But even amateur followers of the city’s rental scene will hardly need the figures reiterating. According to Time Out’s own survey of 700 Abu Dhabi residents renting in the city, many have seen their rent reduced.

Aditi Gouri, associate partner, strategic consulting and research at Cavendish Maxwell tells Time Out that the UAE market is more stable than it was earlier in the year, and that rents are expected to stabilise through the rest of the year, and the first half of 2021 – mostly in the prime locations.

“Tenants are more educated about the real estate market and the impact that COVID-19 has had, know their opportunity cost and are using the softening in rents and prices over the year to renegotiate rents. Overall, this has led to a more competitive property market,” she says.

“There has been increased interest in villas and townhouses as a result of the pandemic. The declines in rents and prices have made it affordable for interested buyers and tenants to upgrade. Well utilised communities such as Al Reef Villas and West Yas have gained popularity since they offer a safe and more private lifestyle.

“Landlords in Abu Dhabi have also been flexible and have been providing tenants with the option of increased number of annual cheques for rent payments, among other incentives.”

She adds that there has been a decline in rents in areas that mostly consist of one to three-bedroom apartments such as Reem Island and Al Reef Downtown.

Katie Burnell, associate director residential sales and leasing at Savills, says that after a strong start to the year, by April, there was “obvious major disruption with the impact of COVID-19” which had a significant impact, with viewings and actual moves on hold due to restrictions.

She adds: “By the end of May we had seen client numbers at the levels prior to lockdown in the UAE and activity levels have grown month-on-month since then as tenants who were unable to move or explore the idea of a new home came back to the market.

“In Abu Dhabi, the capital has seen some of its highest levels of movement for 2020. The impact of COVID has seen clients taking major decisions, whether this be to take advantage of competitive pricing, well maintained and managed units or larger living and outside space. Time working from home has given tenants the opportunity to realise and seek what is important when finding a new home.”

Savills has also seen a migration towards villas from tenants who had been living in apartments. More are also upsizing to take advantage of lower rents and in anticipation of spending more time at home.

“One thing that has stood out for us this year has been the resurgence of the demand for villas and properties which offer outdoor space such as gardens or large balconies which is in contrast to previous years where studios or smaller units would historically generate more traction,” adds Burnell.

“In Abu Dhabi, with the handover of a number of new properties within Saadiyat Island and Yas Island, clients have taken advantage of the opportunity to live in a new home. Pricing has maintained and at certain periods grown due to the demand. Reem Island and apartment living continues to be popular with rental rates becoming more achievable for a number of people.”

Negotiating your next move

“The rental market at the beginning of 2020 started great but hit a pause as lockdown was enforced due to COVID-19,” says Lewis Allsopp CEO of the UAE’s Allsopp & Allsopp. “Clients were no longer able to view properties or move house forcing the rental market to a standstill, but we expect to see the rental market steady as we come into the last quarter of the year.”

There are heaps of options when it comes to moving home and renting a new property, so it’s important to research. Allsopp stresses the importance of this.

“Have a good browse around property portals to look at different areas and the realistic rental prices in each,” he says. “Go and have a drive around the areas before selecting properties to view. You may find that a property you have seen online that you liked, might be a little further away. Find a broker you trust and that can give you great market knowledge of the area you are looking in.”

Burnell agrees that research is key. “This can be from anything from, travel time to schools and the workplace, local shops, neighbourhood amenities, parking, food delivery options, security.

“Take your time on the viewing and view at different times of the day. Does it have enough natural light? Is it noisy at certain times of the day? Is there enough parking after work or at weekends? It’s very easy to be rushed on a viewing but it’s important to take time and check the condition of a property before taking the decision and signing a contract.”

She also advises doing a full home snag, and to check who is responsible for maintenance and make sure it is fully outlined in your contract.

“Be careful when signing a contract,” she adds. “Make sure that the agent you are dealing with is reputable and Abu Dhabi Municipality registered as well as the brokerage they represent.

“Never write cheque payments for rent to anybody other than the name on the title deed and this name should match the owners’ passport copy.

“Any reputable broker would have no problem sharing this with you. Agency commission payments to be made payable to the agent’s company – no cash.”

Best value right now

Abu Dhabi has always retained its rental pricing within certain key areas, according to Savills. “With the additional supply coming on line, these areas are now becoming affordable for a lot of people,” says Burnell.

“Al Reem Island and Al Rawdhat have seen a surge in occupancy within studios and one-bedroom inquiries, while a number of new buildings have been launched offering tenants options.

“On the outskirts of Abu Dhabi, Al Reef will still offer good value if you need a villa, while the Corniche and Downtown Abu Dhabi including areas of Khalidiya are seeing apartment and villa pricing stabilise, offering tenants the opportunity to live within the city.”

According to Chestertons’ Observer Abu Dhabi Residential Report Q2 2020, the highest average rental declines for apartments over Q2 were seen in Al Ghadeer, where average rents decreased by 4.2 percent from Q1 2020.

Al Reem Island saw the second-highest quarterly declines, with average rents falling by four percent driven by a decline in rents for smaller units. Rents for studios declined by four percent and one bedroom units by 7.7 percent reaching Dhs46,000 and Dhs60,000 per year, respectively.

When it comes to villas, the largest decline in average rents was seen in Al Ghadee, with rates falling by 4.4 percent over Q2, following a 2.4 percent decline over Q1 2020. Average rents for three- and four-bedroom villas stood at Dhs95,000 and Dhs120,000 per year, compared to Dhs110,000 and Dhs130,000 over Q2 2019, respectively.

Five top tips for renters

If a tenant believes their rent is above the market average, they should seek the advice of a broker or refer to online listings. There are multiple options available to tenants today which can be used as a negotiating tool with existing landlords if they wish to stay, or landlords at the new property where they choose to move.

It is important to understand whether rents include chiller and maintenance fees. These can considerably add to tenants’ cost of living expense and should be factored in at the beginning.

Consider lease-to-own property, which is relatively new to the market, as banks are currently offering attractive interest rates for these schemes in an environment where property prices are relatively affordable.

Tenants should always be aware of opportune times to negotiate discounts on renewals with landlords and now is the right time to do so.

If the pandemic has had a direct impact on a tenant’s earning potential or if they have lost their job, it is recommended that the tenant communicates this directly to their landlord as this might lead to a rent reduction.

*Tips from Aditi Gouri, associate partner, strategic consulting and research, Cavendish Maxwell