Abu Dhabi's Real Estate Market Booms: Rent Increases and 2026 Forecasts

The real estate boom in Abu Dhabi is set to continue into 2026, following a year of substantial rental increases in 2025. According to the Abu Dhabi Real Estate Market Report for 2025, released by PropTech portal Bayut, rental prices have surged across various segments. The affordable apartment sector saw an increase of 8% to 30%, while villa rents rose by up to 16%.

Other studies suggest that while the pace of rent growth is expected to slow down in 2026, the overall trend remains positive. The market is anticipated to remain tight due to high demand and limited supply, driving residential prices up by about 30% year on year by December.

Preferred locations for both apartments and villas have remained consistent. Affordable communities such as Khalifa City and Al Shamkha continue to be popular choices for tenants looking for well-connected yet affordable living options. In the mid-tier segment, Al Reem Island and Al Khalidiya are highly sought after, while Shakhbout City and Al Raha Gardens are in demand for villas. At the premium end, Al Raha Beach and Yas Island lead the pack for apartments, and Saadiyat Island remains a top choice for luxury categories.

The affordable apartment category saw a notable rise in rents, with an increase of 8% to 30%. The most significant jump was recorded in Al Nahyan, where tenants are drawn to the well-connected and affordable location. In the mid-tier segment, apartment rents climbed by 25%, with substantial growth observed in Al Reem Island and Hamdan Street. The luxury segment witnessed a 32% increase, driven by high demand for one-bedroom units in Al Raha Beach and Saadiyat Island.

For villas, the affordable segment experienced a 16% increase, while mid-tier villa rents grew by 1% to 13%. Luxury villa rents also saw a general increase of 6% to 16% across key locations. However, there have been some corrections, with five and six-bedroom units in Yas Island and Saadiyat Island experiencing a 9% decrease.

Analysts predict that the property market in Abu Dhabi will remain tight in the coming year, with high demand and limited supply. This is expected to push residential prices up by about 30% year on year by December and rents by 23%. Additionally, it is forecasted that approximately 6,500 new residential units will be delivered in Abu Dhabi in 2026, which should help to alleviate some of the supply constraints.

Overall, the real estate market in Abu Dhabi is showing strong signs of growth and stability, making it an attractive destination for both investors and residents.