Tenants in Abu Dhabi could have more reason to stay in their homes for longer as rent restrictions reduce landlords’ ability to raise prices between tenancies, according to Colliers.
The consultancy said limiting rent increases between tenants reduces the incentive for landlords to replace existing residents with new tenants willing to pay higher rents.
Stability vs. Flexibility
For landlords, the regulation could limit near-term rental upside and potentially put pressure on yields. However, it could support higher tenant retention, lower mobility and greater certainty over housing costs, particularly after a period of strong rental growth in the capital.
The change comes as Abu Dhabi’s residential rental market has already started to moderate. Average apartment rents declined two per cent in Q2 2026, while villa rents fell three per cent, according to Colliers. Despite the quarterly decline, rents remained higher than a year earlier, with apartment rents up seven per cent year-on-year and villa rents five per cent higher.
New Homes Exempt
A key part of the regulation is that newly completed properties remain exempt, allowing landlords of new homes to lease them at prevailing market rates.
Colliers said this could create a two-tier rental market in Abu Dhabi. Existing regulated properties would see more limited rental growth, while newly delivered developments would have greater flexibility to establish rents based on current market conditions.
For tenants, that could mean more stability when staying in an existing property, while residents moving into newly completed developments may still face rents set by prevailing demand and supply.
Lower Mobility Expected
If landlords have less ability to reset rents sharply when one tenant leaves and another moves in, the financial incentive to replace existing tenants becomes smaller. Colliers said this should support stronger tenant retention and reduce residential mobility.
Lease renewals already accounted for most leasing activity in Abu Dhabi during Q2, reflecting lower tenant movement as the market entered a softer phase.
The consultancy said an important point to watch will be when and how the rent restriction is eventually adjusted or removed. However, if market conditions continue to moderate, Colliers said the removal of the cap would be unlikely to trigger a sharp rise in rents.
Abu Dhabi’s approach contrasts with Dubai’s planned rent-now-pay-later service, which aims to ease payment burdens through instalment options. Meanwhile, the capital’s real estate transactions doubled to $31.86 billion in the first half of 2026, driven by off-plan residential sales.