Rents in Abu Dhabi increased by as much as 30 percent in some areas last year, with the lack of affordable housing and imbalance between supply being the main drivers, a report has said.
Property portal bayut.com found the average apartment rent increased by 14 percent between December 2014 and December 2015.
According to the report, the average annual rent of a studio apartment went up by 30 percent, from 49,000 to 64,000 AED. Similarly, the average annual rent for a one- bedroom apartment increased from 93,000 to 101,000 AED, a 9 percent increase.
Two and three-bedroom properties saw an increase of 8 percent and 6 percent respectively. The average rent of four-bedroom homes was mostly stable.
Estate agent Paul Sherman, from FC Properties, said he has seen more families moving outside the city, some even to Ghantoot, about half way to Dubai.
He said: “We have noticed many families moving out of even suburban areas like Al Reef due to the hike in rents. Small families and single people, especially those working on the outskirts of the city, have even moved to Al Ghadeer in Ghantoot due to the affordable options there.”
The report suggested the studio rent hikes have been driven by demand from low and middle earners.
“The shortage of affordable housing in the capital is becoming an increasing concern,” the report read.
“The government is introducing legislation forcing 20 percent affordable quotas in all new residential developments in Abu Dhabi. Other possible plans being discussed are reintroduction of rental caps and a rent increase calculator, like Dubai – a move that could address the problem before it gets out of hand.”