Rents rise quicker in newer Abu Dhabi developments

While rents are on the rise across Abu Dhabi, a survey carried out by The National indicates that the capital’s newer developments are posting the biggest year-on-year increases.

St Regis Villas on Saadiyat Island are among the parts of Abu Dhabi that are experiencing the steepest rises in rent. Christopher Pike / The National

Abu Dhabi// Housing rents are rising across Abu Dhabi, but the capital’s newer developments are experiencing the biggest annual increases.

Rents for apartments in new buildings rose about 16 per cent on average, compared to a rise of 9 per cent at some of the older buildings, according to a survey conducted by The National.

The increased cost for these properties went beyond their shiny glass facades, said Ben Crompton, the managing partner of Crompton Partners estate agents in Abu Dhabi.

Reflecting the city’s changing demographics, newer developments – such as the Sun and Sky Towers on Reem Island and Nation Towers in Khalidiya – were being built with more studio units, as well as one-bedroom, two-bedroom, and three-bedroom flats, said Mr Crompton.

These new apartments were attracting singles and young families, the predominant demographic group taking up employment in Abu Dhabi, he said.

The new developments were built with a host of amenities such as swimming pools, tennis and basketball courts, gyms, and retail outlets.

Housing in areas such as Saadiyat Island and Al Reef are also close to beaches.

“The newer building developers are creating a nice environment,” said the realtor. “They are building a lifestyle.”

Also adding to the attractiveness of these communities is their proximity to schools.

Mr Crompton said that Al Raha Beach, an area surrounding Khalifa City and Yas Island, was particularly attractive, given its proximity to Al Yasmina school, Raha International School, and Gems American Academy.

“These areas are all in higher demand and can command better rents,” he said.

In the survey, which asked tenants how much their rent had increased during their most recent renewal, respondents reported an average increase of more than 12 per cent.

Mr Crompton said he was expecting the rent inflation to continue, as the Abu Dhabi Government, one of the biggest employers in the city, was continuing to hire foreigners.

“We don’t see economic sentiment dipping in the city, and there’s not a lot of stock coming online,” he said.

For Neil Robinson, 38, the high cost of housing and unpredictability about rent rises is forcing him to consider leaving the country.

The South African works in logistics and lives on Reem Island with his wife, who is expecting their first child.

During his first year in his two-bedroom apartment, he was paying Dh115,000.

When his rent rose 7 per cent to Dh123,000, he started thinking about how future rent increases, and the uncertainty of how much he would be paying in annual housing costs, was affecting his ability to plan.

“If they suddenly have to give it another hike, at the end of the day, you’ll think about it, because you came here for the money,” he said.

“You have to start second-guessing, and asking if it’s still viable to live here.

“You never know what the increase is going to be at the end of the year. Here, there seems to be no constraint. You don’t know if it’s going to be 8, 10, 12, or 15 per cent.

“You know it’s going to be quite a bit of cash.”

He said he could afford a three-bedroom flat in his native South Africa with three years worth of rent in the UAE.

Real estate agents said this week that the 5 per cent rent cap might need to be reinstated to protect tenants from big rent increases.