Abu Dhabi, the capital of the UAE, has long been a magnet for expatriates seeking job opportunities, including many from Kerala. However, recent developments could affect their cost of living. A new official rent index has been introduced, and it’s anticipated to drive rental rates in the city up by as much as 30%.
Impact of the Rent Index
The rent index is prompting landlords to adjust their rates in response to the heightened demand for housing. This system also provides tenants with a chance to negotiate more favourable rates in areas where rents exceed the official index. The Abu Dhabi Real Estate Center, which oversees real estate regulations, recently released this index, covering the Dhafra, Abu Dhabi, and Al Ain regions. The index allows property seekers to compare rental values based on location and the number of bedrooms.
Current Trends and Future Projections
Asteco Consultancy has reported that rental rates for apartments have already increased by up to two percent in some areas, with rises of up to ten percent in more developed neighbourhoods. While existing tenants are protected by a five percent cap on rent increases for renewals, those in high-demand areas, such as Saadiyat Island, have experienced significant rent hikes.
Population Growth and Its Effects
Abu Dhabi’s population, which reached 3.8 million last year, now makes it the most populous emirate in the UAE. This rapid growth is intensifying the demand for housing, contributing to the rising rental rates.
