Abu Dhabi rent cap may encourage tenants to remain as landlords lose room to raise rents

Tue, Sep 01, 2026 | Rabi al-Awwal 19, 1448 | Fajr 04:40 | DXB 35.5 °C New restrictions on how much landlords can increase rents between tenancies may make tenants in Abu Dhabi more likely to stay put, according to Colliers. The consultancy says reducing the scope to hike rents when one tenant leaves diminishes the financial motive for owners to seek new occupiers prepared to pay higher rates. That dynamic could boost tenant retention, lower residential turnover and provide renters with greater predictability over housing costs following a period of strong rental rises in the capital. Colliers warns, however, that the rules could cap near-term rental upside for landlords and exert pressure on yields. The residential market has already started to cool: average apartment rents declined two per cent in Q2 2026, while villa rents fell three per cent, Colliers reports. Despite that quarterly dip, prices are still up on the year, with apartment rents seven per cent higher year-on-year and villa rents five per cent higher. Newly completed properties remain exempt under the change, giving owners of new homes latitude to set rents at prevailing market levels and potentially creating a two-tier rental market in Abu Dhabi. Existing regulated stock would face more restricted increases, while newly delivered developments could establish rents based on current demand and supply. Lease renewals already made up most leasing activity in Abu Dhabi during Q2, reflecting reduced tenant movement. Colliers says the key issue will be how and when any cap is adjusted or lifted, though a sustained moderation in conditions would make a sharp rebound in rents unlikely. Alyaa Aldhanhani is a business reporter based in Fujairah. She covers business, markets and lifestyle trends in the UAE with a focus on stories that connect with everyday readers. In her spare time, she enjoys exploring new cafes, drawing, and staying active. ©2026 Galadari Printing and Publishing LLC. All rights reserved.