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 in Abu Dhabi. And it doesn’t have to be as complicated or as expensive to rent a new place as you might believe. We’ve spoken to experts from top property firms in Abu Dhbai 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
We don’t need to remind you that last year was pretty turbulent. And that was reflected in the rental market – although it was actually to the benefit of those renting in Abu Dhabi. Rents got lower, and there were some top deals to be had. In fact, in 2020 average rates were down by 2.2 percent for apartments and two percent for villas, on a quarterly basis, according to Chestertons last year.
Fast forward 12 months, however, and things are starting to level off. Which means many of us are now asking questions on whether it’s the right time to move.
Andrew Covill Director of Henry Wiltshire International says there is “good demand for medium and high quality townhouses and villas” but there is “not enough supply” of these coming onto the market, so it’s worth acting when you see something you like.
“There are still many mediocre apartment buildings being constructed with poor quality interiors, odd layouts and a lack of balconies and terraces,” he adds.“Tenants and buyers expect better nowadays and developers need to design accordingly. Rental yields remain strong and we expect that to stay (in the better developments) for a long time so investment buyers are back out there.”
Katie Burnell, Associate Director – Head of Residential Agency Abu Dhabi at Savills agrees. “Abu Dhabi has remained stable when releasing product to market, being cautious so not to oversupply and dilute the market, particularly within Aldar villa communities,” she says. “This strategy has proved extremely popular for buyers who have bought for investment – tenants are waiting for their properties. Tenants look for well managed and well maintained units, particularly in apartments.”
An increase in easy loans is also causing a switch up.“Borrowing from the banks is the cheapest it’s ever been so many more people are switching from renting to buying,” says Covill.
Interestingly, unlike its sister Dubai up the road, which is seeing a rise in short-terms rents due to to Expo 2020 Dubai, the short-term rental market has not been in demand in the capital, says Lynnette Sacchetto, Director of Research and Data at Property Finder, so that is another option for renters who aren’t sure of where they want to move to immediately.
Best-value right now
So you’re looking to move, where’s the best value, right now?
According to Burnell, Raha Beach is a good choice. “Raha Beach offers numerous options with a variety of price points and incentives especially for apartment living,” she says. “For villas, Saadiyat Beach Townhouses remain competitive in pricing, offering value for money in sizing and quality. When it comes to demand, Yas Island and Saadiyat Island still remain as the popular choice for tenants.”
Covill thinks that for villas and townhouses Al Raha Gardens still boasts some of the best value for money, “with high quality fittings and design and great community facilities”.
“For apartments, probably Reem Island and some of the smaller developments along the new canals in Al Raha Beach,” he adds.
Luxuryproperty.com Leasing Manager, Camila Pretorius adds that “For the most part, increases have been in established areas with excellent infrastructure and fantastic amenities – good design aesthetic is always key, as well as proximity to beaches and public transport networks. Affordable luxury is the key when it comes to value in renting.”
Are rents on the rise?
Well, yes. Though if you’re looking for an apartment you have a better chance of securing a top deal. So now may be the time to downsize from a villa, or even upsize if you’re in a studio apartment and fancy a little bit more space – but again it’s probably wise to act fast before the tide turns.
Burnell says that apartment prices haven’t seen a significant increase, but adds, “The decline in pricing that took place last year has now plateaued and we see stability happening within the apartment market.”
Want more space that includes a garden and outdoor area? You’ll have to fork out a bit more for that. Villa prices are on the rise, she says, with Yas Island having seen the largest increase in villa prices over the past six months – with an average 25 percent rise in rental value.
According to Savills rents are also rising certain areas in Saadiyat Island, such as Hidd Al Saadiyat, Jawaher.
Sacchetto agrees that Property Finder has also seen a “significant increase in demand” for villas / townhouses. “As people were able to save more money during the pandemic and with all-time low interest rates, many decided to buy in the capital as well as looking for outside space, gardens and more living space,” she says.“The challenge in Abu Dhabi is low supply of villas, therefore prices have increased in areas like Saadiyat Island and Yas Island.
“However, on the flip slide, there is an oversupply of units on Al Reem Island where prices are very negotiable. The apartment segment has struggled due to job losses and high supply, therefore putting pressure on apartment prices.”
Sachetto adds that she expects to see prices continue to rise both in sales and rental in the villa / townhouse communities.
And if you are looking for an apartment, it’s worth looking around and seeing what you can get – or can live without – as certain vistas come with a higher price. Sea view or larger sitting room, it’s your choice.
“The most popular apartment communities where availability is tight are still proving to be the original master planned communities by Aldar such as Al Bandar, Al Muneera and Al Zeina. The better positioned apartments with sea views are in the most demand and we have seen these prices rise and a lack of options in certain categories,” says Covill.
“These developments remain popular over ’single building developments’ as they have a wider range of facilities such as beaches, multiple pools, retail, cafés, restaurants, child care etc. Also, beachfront Mamsha on Saadiyat Island prices are up for the same reasons. Rents for some of the best sea view apartments are up 20 to 30 percent.”
He agrees that there has been a “significant price rise” in all of the premium villa communities such as the Saadiyat developments, Yas Acres and West Yas.
“Even the slightly older developments such as Al Raha Gardens, Golf Gardens, Sas al Nakhl are full and prices are up,” he says.
“There is a generally lack of availability, which is pushing the prices up. This is amplified as there is extra demand from people moving from apartments to villas. There are also a number of new arrivals into Abu Dhabi as companies expand and new projects open.”
What is most popular right now?
The news isn’t surprising, after being cooped up in cramped apartments with no outdoor space for some of last year, villas are on the menu for a lot of people. Gardens, larger rooms and all-round more space is appealing, especially when you’re looking at life a little bit differently these days.
“Tenants seek outdoor space and the ability to work / home school from home if needed,” says Burnell.
“The past 12 months has made everyone rethink their home environment. And with a larger choice of villa communities than ever before in Abu Dhabi, families are choosing villa living over apartment living.
“That said the new apartment development in Yas Island, Mayan, recently launched by Aldar has received a lot of interest and uptake in occupancy has been extremely well received within one of the buildings we lease exclusively.”
Pretorius adds, “The pandemic, lockdown and working from home have all served to make people think about their living experiences, with families looking for more amenity space, homes with gardens, and space to get away from everyone.
“The events of 2020 and the worldwide pandemic have led people to think, ‘what if this happens again? I don’t want to share communal living space, or elevator space with other people’. As a result, they are seeking out homes that offer them incredible levels of privacy.”
But where are people looking?
For those with the budget, says Covill, Saadiyat remains a popular choice, as you’d expect from the gorgeous location.
“Yas is a close second with people looking to move right now, while Al Raha Beach always popular and in demand both for sale and for rent,” he adds.
“But while there is a general move from apartments to villas, there is also an upshift from smaller apartments, often in the city to the likes of Reem Island and Al Raha Beach for the space and lifestyle, so that is keeping the apartment buildings in these areas full too.”
Stay or move?
Lewis Allsopp, CEO of Allsopp & Allsopp says they have noticed that several landlords are requesting rental increases, especially in villa communities and, in most cases, tenants are agreeing to the rent increase. In Abu Dhabi the rental rise is capped at five percent.
“With rental prices rising, it is beneficial to a tenant to take the rental increase and stay in their current property than move to another where they risk paying more and also have the moving costs to endure,” he says.
Pretorius agrees adding, “Newer homes will be more expensive, and it would ultimately make more sense to stay where they are.”
Stay or go? It’s your choice.
Get insurance
Do you know how much your laptop is worth? How about that pair of earrings your granny left you? Surprising as it may seem, home insurance is frequently neglected in Abu Dhabi.
It’s not expensive compared to the cost of refurnishing your entire home if worst comes to worst, and it means you can relax in the knowledge that your Abu Dhabi property is fully protected. You also need to evaluate your belongings accurately – they might be worth more than you think. And when most contents insurance costs less that Dhs500 a year, it’s not worth taking a risk.
The good news for Abu Dhabi rental tenants is that their home is likely to be insured by the landlord, but be warned – that policy probably only covers the physical aspects of the apartment or villa (for example, damage to the building itself). It won’t cover your belongings, so it’s important to take out your own additional coverage for maximum protection.
Do you have Tawtheeq?
Landlords need to register. Here’s everything you need to know.
Three top tips for renters
From Cavendish Maxwell
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 that 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.
Moved and want to make the place look brighter? Here’s how to spruce up your home for less.
